Small Business and cost of compliance
My cousin’s friend runs a local bakery in Goa.
He accepts only CASH.
No UPI/CC/Debit Card-- nothing!
Logic: if he accepts anything in 'white', he will pay around 20% tax.
On top of this, he would have to have an employee to manage his finance, go to a CA--- this would easily add up to another 1.5-2Lakh/year expenses (plus loss of time).
At 20-30L/year business, the scale does not make sense for him to take 20% tax hit + another 10-20% compliance cost.
One could debate the morality: but meet 100 people doing small businesses in India, the tax structure + compliances makes them uncompetitive.
We are slowly gravitating to big player ecosystem, where there is economies of scale.
The only way left for many of these small businesses to compete is to cheat on taxes. more
He accepts only CASH.
No UPI/CC/Debit Card-- nothing!
Logic: if he accepts anything in 'white', he will pay around 20% tax.
On top of this, he would have to have an employee to manage his finance, go to a CA--- this would easily add up to another 1.5-2Lakh/year expenses (plus loss of time).
At 20-30L/year business, the scale does not make sense for him to take 20% tax hit + another 10-20% compliance cost.
One could debate the morality: but meet 100 people doing small businesses in India, the tax structure + compliances makes them uncompetitive.
We are slowly gravitating to big player ecosystem, where there is economies of scale.
The only way left for many of these small businesses to compete is to cheat on taxes. more
Viewed by 298
I disagree COMPLETELY with this thought. Paying taxes does not make the business in-competitive. This is pure non-sense. It is in fact such people who have ruined our country. IS THERE ANY ORGAISATION that does not raise its selling prices if the Price they sell at, is in-competitive? No one pays taxes on basis of SIZE of the business, large or small. They pay taxes on basis of income earned. At least on thing is agreed upon, that they "CHEAT of taxes. Suh people deserve to go to jail. more
Jan 10
govt should spare small business either asking them to pay a nominal tax which is not going to hurt them otherwise this will go on like this more
Jan 02
