A Bengaluru-based entrepreneur has sparked a fresh debate on India’s taxation and compliance framework after announcing his decision to leave the country, citing what he described as a system that penalises even the most compliant businesses.
Rohit Shroff, founder of the Aflog Group, said he plans to move out of India in 2026, arguing that the current approach to taxation places disproportionate pressure on a small group of honest taxpayers while offering little incentive or support in return.
‘Compliant taxpayers face constant suspicion’
In a LinkedIn post shared last week, Shroff said he had paid around Rs 4 crore in GST and income tax over the last 18 months. Despite this, he claimed that compliant businesses continue to face repeated scrutiny from authorities.
“In the last 12–18 months, across my businesses, in GST and income tax, I’ve paid over Rs 4 crore to a country that looks at its most compliant contributors with suspicion by default,” he wrote.
Shroff pointed out that less than 5 per cent of Indians pay direct income tax, yet this small segment is subjected to frequent notices, clarifications and audits. He said scrutiny comes from multiple layers, including local GST officials and national income-tax teams.
“This scrutiny is constant and layered,” he said.
He added that businesses continue to meet all compliance requirements, including monthly GST filings, quarterly TDS payments and annual income-tax returns, even as the process becomes increasingly time-consuming and expensive.
‘No reward for doing the right thing’
According to Shroff, the compliance burden offers no tangible benefit to those who follow the rules. He argued that responding to repeated notices often costs businesses more time and money than the actual tax paid, creating frustration among entrepreneurs.
“The system is designed to win the confidence of the majority, not to enable the minority that builds formally and pays consistently,” he wrote.
Shroff said tax-paying business owners are politically insignificant, making them easier targets for regulatory pressure. As a result, many entrepreneurs, he claimed, choose to comply quietly rather than challenge the system, despite its complexity.
Drawing a comparison with opportunities abroad, Shroff noted that many Indians thrive outside the country because they are not constrained by similar compliance hurdles. In contrast, he argued that India’s framework discourages growth instead of supporting it.
“I’m done living the ‘building in India’ dream,” Shroff wrote. “The goal for 2026 is simple: move out of the country and build elsewhere.”
He further added, “It hurts to say this, but at some point self-preservation matters more than slogans. This isn’t about patriotism. It’s about reality. The system is flawed. There is no real development, and there is no genuine ease of doing business here.”
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