‘System penalises growth’: Bengaluru entrepreneur vows to leave India after paying ₹4 cr in taxes

A Bengaluru-based entrepreneur’s decision to quit India over what he calls a “flawed” taxation and compliance system has reignited a wider debate on ease of doing business, tax scrutiny and whether the country rewards its most compliant taxpayers. 

Rohit Shroff, founder and partner at Aflog Group, said he plans to move out of India in 2026, citing relentless scrutiny by tax authorities despite full compliance. In a detailed LinkedIn post that has since gone viral, Shroff claimed that over the last 12-18 months, his businesses paid more than $500,000 (around ₹4 crore) in GST and income tax, yet continued to face repeated notices, clarifications and audits. 

“In India, barely 4-5% of the population pays income tax. And yet, when notices are sent, scrutiny intensified, the same small group keeps getting targeted — the compliant,” Shroff wrote. He argued that law-abiding businesses are subjected to layered oversight from local GST officials to national income tax authorities, with “zero acknowledgement” or tangible benefits in return. 

According to Shroff, compliance itself has become a cost centre. Businesses are required to file GST monthly, TDS quarterly and income tax annually, often hiring entire teams just to keep up. “Fighting the system costs more than submitting to it, so most don’t resist. They pay, respond, and move on,” he said, questioning the long-term incentive to continue operating in India under such conditions. 

He also suggested that the system is structurally tilted against formal, tax-paying enterprises. “The system is designed to win the confidence of the majority, not to enable the minority that builds formally and pays consistently,” Shroff wrote, adding that such contributors are politically insignificant and therefore easy to “ignore or extract from”. 

Drawing a contrast with Indian entrepreneurs abroad, Shroff noted that Indians successfully run large businesses in the UAE, the US and other global markets. “When they leave, it isn’t because they hate the country. It’s because the system doesn’t reward growth. It penalises it,” he said, concluding that self-preservation now outweighs patriotic slogans. 

The post triggered a flood of responses from citizens, many echoing his frustration. One user recounted how a friend in Trivandrum was subjected to income tax scrutiny every year simply because there were “so few people who pay high taxes” locally, making them easy targets to meet departmental targets. “They squeeze those who already pay a lot,” the user wrote. 

Another commenter, who recently returned to India from the US for family and health reasons, said tax scrutiny followed him across borders. “They were angry how my tax liability dropped in India even when I was earning in the USA,” he wrote, adding that beyond taxes, deteriorating air quality, pollution, food adulteration and rising inflation made him question “what are we even paying for”. 

However, not all reactions were sympathetic. A third user pushed back strongly, arguing that GST is collected on behalf of customers and not a direct contribution by businesses. The commenter pointed out that India’s weighted average GST rate is close to 10% and corporate income tax stands at around 25% on profits, calling these “nothing exorbitant”. Highlighting India’s rapid economic growth, poverty reduction and the rise of hundreds of unicorns, the user said, “If you want to save taxes and lead a better quality of life — sure you can move out, but don’t blame the country unnecessarily.” 

Shroff’s remarks come at a time when the government has repeatedly highlighted improvements in India’s ease-of-doing-business metrics, digitalisation of tax systems and reduced corporate tax rates to attract investment. Yet, the strong reactions to his post suggest that for many entrepreneurs and professionals, ground-level experiences with compliance and scrutiny continue to shape perceptions — and, in some cases, decisions about whether to build their future in India.