‘Wealth tax could send billionaires from India to Dubai, impractical,’ says economist on Rahul Gandhi's equity proposal
wealth tax in the country. Speaking to ANI, he said such a move could drive India's wealthiest individuals to relocate their businesses to tax-friendly destinations such as Dubai. On the potential repercussions of such a tax policy, he said the wealthiest Indians, such as the Ambanis, and Adanis, might choose to emigrate to tax havens, leading to a substantial loss of wealth for the country.
"The very rich, that is the Ambanis, the Adanis, the Mahindras, the Tatas, and I presume not more than 500 or less of the very rich, the billionaire class, they will emigrate from India to Dubai. Most Indian millionaires who have been leaving the country have gone to Dubai, 70 per cent in fact, because Dubai has no income tax. And they will re-register their businesses in UAE, which means India will only be able to collect corporate taxes from them because their business will remain in India," Sen said.
"So there will be a huge loss of wealth to India. Now, if you think about other countries, Sweden used to have a very significant inheritance tax. And Sweden is one of the highest tax countries in the world in history.
But you know, Sweden removed the inheritance tax because many of the rich were fleeing. For example, the owner of IKEA had migrated out of Sweden," he added as an example. Sen also cautioned against the practicality of imposing such a tax in India, citing challenges in surveying all households and businesses.
"In India, 2.4 per cent or a little bit fewer people pay income tax. that is personal tax. Of that group, I think not more than 1.2 million, maybe a little bit more, have personal assets which are mainly in their own residence.
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