🏙️ A Gift for GIFT (City)

by Sreetama

Dang, Jeff Bezos is Stepping Down.
The 30-year reign to build a trillion-dollar business is going to end this August. While Andy Jassy, the CEO of AWS will be taking his throne, Jeff might devote time to his space baby Blue Origin. Yawn is the greatest compliment an inventor can receive: Bezos said that if you do it right, a few years after a surprising invention, the new thing has become normal. People yawn! From life tough for the brick and mortar mom and pop stores🏪 to changing the way the world shops,🛒 he’ll be remembered for building one of the world’s largest businesses- Amazon.

🏙️ A Gift for GIFT (City)

India has a major plan to expand the scope of her booming Fintech industry as well as make its way to a $5 Trillion economy. The Fintech market is expected to hit INR 6,207.41 Billion💰 by the end of 2025, expanding at a Compound Annual Growth Rate (CAGR) of 22.7% from 2020 to 2025.

Enter GIFT-City. Budget 2021 saw that a few matters were attended to. A “world-class” fintech hub near Gujarat’s capital Gandhinagar – GIFT City (Gujarat International Finance Tec-City) was proposed. Tell me more? It is a planned business district connecting Ahmedabad and Gandhinagar and spread across 886 acres of land and 62M square feet of built-up area. Office spaces, multi-service special economic zone (SEZ), exclusive domestic area including residential apartments, schools, hospitals, hotels, clubs, retail facilities, and other recreational facilities along with India’s 1st International Financial Services Centre (IFSC). 🤯Whaa…aattt?i

What is IFSC?🤷‍♂️ The IFSC is a non-resident zone under the Foreign Exchange Management Act (FEMA) but treated as a resident entity under the Income Tax Act. An IFSC caters to customers inside and outside the jurisdiction of the domestic economy and deals with flows of finance, 💸 financial products & services across borders. GIFT’s IFSC is to be in line with global centers like London, New York, Singapore, Shanghai & Dubai.

Tax Incentives. To promote foreign investments and offshore funds, Nirmala Sitharaman proposed 2 tax incentives for the✈️ aircraft industry:

(i) a tax holiday over capital gains for aircraft leasing companies

(ii) tax exemption for aircraft lease rentals paid to foreign lessors

What Does This Mean? Indian airlines like IndiGo, SpiceJet, GoAir, Vistara, and AirIndia rely largely on international giants like Airbus and Boeing for their aircraft. They usually lease hundreds of aircraft from them. 🤦Almost 12 to 18% of their overall costs go into repaying such hefty amounts. These incentives might just give foreign leasing companies a reason to set up a base in India and take advantage of this exemption.

Not Just That.👆 The success of this GIFT’s IFSC will bring ideas and innovations and unlimited access to global financial ecosystems. It will help create around 75k jobs by 2030. Dipesh Shah is the Head of Development and International Relations at GIFT. He says, “The Government’s vision for GIFT City in India provides a great opportunity to bridge the gap Hong Kong has created. It will play a very large role in international financial services. If India requires 2-3 trillion dollars for manufacturing, infrastructure, etc. over the next ten years, then almost one trillion dollars can be raised through GIFT City, whether it is through masala bonds, or foreign currency bonds or equities”

Quite a vision! A game-changer, perhaps?

🚬 The Pro Cigarette Tax – Crazy Tax Story

Puff Your Way. In 2009, The Gong’an county government in Hubei province ordered its staff and citizens to smoke 230,000 packs of Hubei-produced cigarettes a year, or risk being fined.😱 This was to boost the local economy via the cigarette tax and encourage financial prosperity for China’s local cigarette makers. As smoking is integrated into the very fabric of the Chinese, it was not difficult to put the plan in motion.

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