Indian entrepreneur quits country over ‘flawed’ tax system and endless audits
Rohit Shroff, founder of Aflog Group, has announced plans to leave India by 2026. He cites a 'flawed' taxation and compliance system that he claims unfairly burdens law-abiding businesses. His recent LinkedIn post sparked widespread debate among entrepreneurs and taxpayers.
Shroff revealed that his businesses paid over $500,000 in GST and income tax over the past 12-18 months. Despite this, they faced repeated tax notices and audits. He argues that compliant taxpayers endure heavy scrutiny while gaining no clear advantages in return.
The high cost of compliance—including hiring teams to manage tax filings—often exceeds the penalties for non-compliance, according to Shroff. He believes the system is structurally biased against formal, tax-paying enterprises in India.
His post drew hundreds of responses, with many sharing similar frustrations. One user described a friend who faced annual income tax scrutiny simply for being a high taxpayer in their locality. Another, returning from the US, reported tax scrutiny despite earning income abroad.
Not all agreed with Shroff’s criticism. One commenter argued that GST is collected on behalf of customers, not businesses, and defended India’s tax rates as reasonable given the country’s economic growth. Shroff also contrasted the struggles of Indian entrepreneurs at home with the success of figures like Kiran Mazumdar-Shaw, founder of Biocon, who expanded globally.
Shroff’s decision to relocate highlights ongoing concerns about India’s tax and compliance environment. His case reflects broader frustrations among business owners who feel penalised for following the rules. The debate continues over whether the system needs reform to better support compliant enterprises.
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