CAN MODI MAKE SMALL BUSINESS HAPPY?


Yes, only if the tax system is simplified


Can Modi Make Small Companies Happy?

Small companies and business units, especially those with a turnover size of less than Rs 50 lakh suffer a lot under many pressures, various rules and regulations. They are unable to hire a professional hand to look into all these for a cost. No one in small business segment knows what is called easy to do business atmosphere.  They do their business always under fear and in hand-to-mouth manner. They are the most tortured ones for their inability to pay unbearably heavy bribes for some seemingly unavoidable mistakes. They are often caught for shortcomings and penalise at the same rate that large cats are charged at. While large companies have capabilities to hire high profile legal and accounting professionals to fight, small enterprises are at no one's mercy. 

In fact, small are always at the receiving end - under the lenses of tax men, law enforcers, savage clauses of penalties and snoozes of local body rules. There are many cases of tax demands, which are often half or even equivalent of their turnover size! Anyone can simply understand the fact;  if a company ends up paying for the Tax demand that is a major portion of their average turnover, it cannot run the business further.  The owner will run away. Employees working with the unit will face the uncertainty of their earning for meeting their both ends. Can the rules that force the company close down assure job for anyone in such circumstance? Then what are the solutions?  Yes, there are simple solutions which can at one strike obliterate the menacing craze of officers for making money and treat the cancer of bribes forever. 

Simultaneously, the government can infuse a heavy doze of lasting relief in to small entrepreneurs. While tight rules force them to violate it under some unpleasant circumstances, inability to pay bribe take them to face terrifying prosecution. Many hapless families along with them suffer. Their children suffer. They remain dejected. They form a huge block of disappointed section. 

In business they are infants, naturally deserving some special attention and mercy. But our Tax Rules and other Acts kill them mercilessly - call it an open beheading in ISIS style. Killing a business unit is as worst as murdering an infant. Rules should not be the hang-men for the hapless small business.

Let the government find how small companies after small companies suffer and meet with their untimely death.
In the overall business category, this segment constitutes around 90 per cent, though their share to the overall economy is too small. But they generate huge size employment for people of lower category.  

 

Easy tax ways for Small Companies for their survival and encouragement:

 

1. Remake the tax structure for small companies having turnover size of Rs 50 lakh with Five Per cent flat tax on the total turnover without scrutiny under any circumstance. For those who are filing late, make it six per cent. On late filing one per cent extra tax for three years as penalty can be imposed.


2. Let the government give such companies an option for five per cent tax either through TDS or timely payment of five per cent on the turnover without refund so that they don't need to file any other details than total income Statement. 


Benefit

1. This will drastically reduce the work load of tax men on refund process, scrutiny and avoidable appeal process, besides convenience for small companies. 

 

2 . The government also will have more income as average income tax collection will be more from small companies. Small companies also will stop showing losses and sickness at the cost of tax hunt on them can be prevented.


3.This will prove to be a morale booster for tiny enterprises, which do not have any credit line from institutions.