Day 17 – Q 5. What do you understand by the concept of ‘tax holiday’? How does it help in the promotion of specific socio-economic sectors?
5. What do you understand by the concept of ‘tax holiday’? How does it help in the promotion of specific socio-economic sectors?
‘टैक्स अवकाश’ की अवधारणा से आप क्या समझते हैं? यह विशिष्ट सामाजिक-आर्थिक क्षेत्रों के उन्नति में कैसे मदद करता है?
Introduction
A tax holiday is a government incentive program that offers a tax reduction or elimination to businesses. Tax holidays are often used to reduce sales taxes by local governments, but they are also commonly used by governments in developing countries to help stimulate foreign investment.
Body
The tax holiday can help in promotion of socio-economic sectors
1) Growth of MSME: Provide requisite time for MSME to invest more of their profit.
2)Startups: Many startups which focus on sectors like education, health care when given tax holiday get requisite support which would help them in expansion of business.
3) Development of notified areas: The tax holidays granted if development is taken up in notified areas encourage the industries to develop those areas.
4) Generation of employment: Tax holidays when are given help employers to employee number of people.
5) Growth of Agriculture: Will encourage innovation and new ways to increase growth if Agritech is supported through tax holidays
6) Development of tribal products: Support to innovative arts of tribes could help them move out of poverty and showcase the talent to world
Conclusion:
Tax holiday can help to increase growth and encourage new ventures which can act as a catalyst to economic growth.
Best Answer: Shilpi
