Do more taxes mean greater growth and prosperity? Maybe not! There are a myriad other ways to fill the kitty. For eg, in the UAE, there is NO income tax!! Just VAT at 5% across the board including VAT they get from the millions of tourists that flock countries like Dubai for sheer entertainment and shopping carnivals. But look where the UAE is in infrastructure etc. UAE is the second largest in the ME after SA, with a GDP of USD 414 billion in 2018!! It is 40 times smaller than India but its GDP is just 6 times less than India's but a per capita GDP of $39,709 (nominal, 2018)!!!
Tourism is one of the bigger non-oil sources of revenue in the UAE, with some of the world's most luxurious hotels being based in the UAE. A massive construction boom, (I saw this happening last week while in Dubai where a huge number of projects were taking shape including metros, hotels, entertainment hubs and so on being constructed at breakneck speed 24X7), an expanding manufacturing base, and a thriving services sector that are helping the UAE diversify its economy. And then it ranks 16th in the Ease of Doing Business. We are way way down the ladder here. What are we doing in this regard? SFA!
Dubai, having far smaller oil reserves than Abu Dhabi and becoming less dependent on oil now, is diversifying at breakneck speed and see where it is today! It's spanking 12 lane motorways, (Having speed limits upto 120 kmh in town!!!) superbly designed skyscrapers, swanky shopping malls (Dubai has the biggest mall in the world and the tallest building, the Burj Khalifa!), entertainment that is way better than any in the world and incredible cleanliness. Millions of tourists flock Dubai every year to have a feel of this out-of-this-world landscape! And Dubai makes billions from this.
Except for a lot of hot air being spewed by our great economists, nothing seems to be moving! Our manufacturing base is shrinking, a once thriving services sector is in the boondocks and we have run out of ideas on how to diversify our economy. High time we pull up our socks and get down to action than mere lip service if we are to become a $5 trillion economy in the next 5 years.