I've recently read that only something like 3% of Indian population pays any income taxes - that's probably one of major reasons.

What the actual fuck? Is this by design or do a billion people all manage to game the system?

From what I've read, most people make so little that they're exempt from the tax altogether.

I've been to India, and I'm quite sure nobody I met except maybe the hotels serving tourists, was paying taxes. Shops, restaurants, businesses all only accepted cash. And they also never give a receipt. So yeah, 3% sounds about right.

I live in South Africa. It's a similar situation here. The problem is that most people are so poor, they legally don't have to pay income tax. (because they are unemployed or have a really shitty income)

In fact, around 3% file their tax returns. Under 2% actually pay tax (rest are in non-taxable income slabs)