Amnesty scheme on cards for black money

[Yusuf]

NEW DELHI: The finance ministry is devising a voluntary tax disclosure scheme that could provide amnesty to people who have stashed unaccounted money in tax havens and other jurisdictions abroad by charging them a "levy"

Amnesty scheme on cards for black money - The Times of India

 

[sayareakd]

yeah i want amnesty scheme, but first give me black money.

what fraud are we committing here, instead of sending them to jail, we are giving tax benefits and legitimaty for whole act.

Investigate industry captains and send them to jail, Tihar is good holiday destination with free food and natural open AC in Delhi cold.

 

[thakur_ritesh]

hahaha saya not happening mate, at least this government doesnt seem the one to pull that off.

the only good thing i see coming out is a good chunk of money could then become a part of the economy.

this on the other hand clearly shows the government is not at all interested in getting the black money through the present legal route which means there indeed would be some pretty big fish who would have the black money stacked overseas who are going to be shielded through this measure, and then the government wonders why is there so much support for anna hazare.

SC needs to take a note of this and not allow any such amnesty to happen, and if at all this is to be allowed, tax them heavily and not just charge them a levy, whatever that is supposed to mean, else anna takes to the streets yet again.

 

[Yusuf]

Mate do you really think this government or another would actually go all out to hold to account all those who have stashed up money abroad? Lets be realistic. Its better to get the money back into the economy than to lose it forever. I bet my bottom paise that even if the NDA came to power it will not go after all those who have black money.

First of all, the case will be stuck in technicalities. Do you think smart Indian businessmen would have stashed all that money in their own names? Do do think the swiss will show who the real owner is? Even if they do, these people will deny and get behind technicalities.

And what makes us thinks that this black money does not come back to India? Money in the bank is of no use unless its invested into more profitable business. India being one of the hot investment destination, this money does come back. But the cycle is that the gains of this investment will get converted back into black, go out and come back at a later stage when a new idea to make money comes up.

 

[Phenom]

Wasn't there such a scheme when the UF govt was in power and PC was the finance minister?

If this scheme can turn the billions of black money into white then I would support it.

 

[prahladh]

FIght against corruption results in immediate jail. But the corrupt get Amnesty. I guess Kani, Raja, Daya, Gali can declare all the wrong doings, pay the fine and roam free.

 

[Yusuf]

With the legal system we have and the lack of political will/political compulsion, it's better to get the black money after the "levy" as they have called it and give amnesty.*

 

[johnee]

With the legal system we have and the lack of political will/political compulsion, it's better to get the black money after the "levy" as they have called it and give amnesty.*

Agreed. Atleast, they are bringing it back into economy somehow. I dont expect any better from present regime.

 

[thakur_ritesh]

Mate do you really think this government or another would actually go all out to hold to account all those who have stashed up money abroad? Lets be realistic. Its better to get the money back into the economy than to lose it forever. I bet my bottom paise that even if the NDA came to power it will not go after all those who have black money.

First of all, the case will be stuck in technicalities. Do you think smart Indian businessmen would have stashed all that money in their own names? Do do think the swiss will show who the real owner is? Even if they do, these people will deny and get behind technicalities.

And what makes us thinks that this black money does not come back to India? Money in the bank is of no use unless its invested into more profitable business. India being one of the hot investment destination, this money does come back. But the cycle is that the gains of this investment will get converted back into black, go out and come back at a later stage when a new idea to make money comes up.

Yusuf,

completely agree on NDA going to prove it self as no better than the UPA, at least that is what i believe very strongly and i guess never have i ever said contrary through my writings ever, i see both the UPA and the NDA as largely no different, more a case of kumbh ke mele ke bichre hue bhai.

as i said earlier, yes indeed the good thing would be the money comes into the system which is extremely important but i hope the levy being proposed is no less than at least 10%, if not more.

but what is the message for people like you and i, the man on the street? we all pay our taxes, and on time, in case people like you and i dont pay up our taxes, we would have to pay triple the amount, be prosecuted, termed thieves, and land up in jails. what is the message the elitists will be getting? they would feel if they can get away like this once, then they can repeat it every given time because for them indeed law would then be no more than an ass which can be given any direction to their liking and get away, and so no need to pay the taxes and the vicious cycle continues. what is the mechanism proposed under this amnesty which assures that no more black money will be generated which then again will be moved to off-shore locations? how will the government guarantee that all this money stays white and doesnt get converted into black, which will happen very-very quickly right under the eyes of this very government. none i believe, government on that front has practically no solution so why would the fearless law breaker/law twister every worry?

this is where the anger on the street comes from. there are different set of rules for people like you and i, but its completely different for the elitists. if they want to have the such rules then make it same for everyone, why am i taxed 30%, why am i not asked to pay a minuscule tax as well, and if i get late in trying to source some information, the very next day i need to pay the late fee in terms of interest on the calculated tax which compounds my tax liability by quite a few % points over the 30%. tax me 10% as well and if by any chance i dont pay it on time and wake up from sleep after 20 long years that oh i need to pay the tax, and need to convert all that money into white which by now would have become black, then allow me to do that as well. why are people like me, the man on the street, made the scapegoats? lets have common rules, am i asking for too much?

the point of over ruling the technicalities is very simple and straight forward. rather than drafting this amnesty, better would be the government drafts a bill and gets it passed in the parl which makes it clear, any money sent over seas from india or is found to have indian connection in which ever form or is proved to be of indian source or within india which is a part of the parallel economy and gets caught will be made government property, the time to claim the above be no more than 100days from the date of notification issued by the government of make it a government property. people claiming will have to pay a tax of no less than 35% and take it away without any prosecution or further penalties in any form. mind you i am no tax man, or someone who drafts a bill and i am sure they would have much better and refined ideas.

black money comes in and goes out unchecked because the political will is completely missing, people sitting in the high offices of this country need to be answering why it is allowed to happen. all this is happening because it is being allowed to happen. let us have good clean systems in place, let us not tax the people too heavily that then feel no other option is there other than moving the money overseas from which others benefit, if we have that why would people feel the need or even dare to do all that?

 

[Yusuf]

Ritesh,

There are two parts to the black money thing. One is political money and the other is business money.

Political money is the one which is actually "looted" by means of kick backs. Dont expect this money to ever come back to India under amnesty as well.
The other is business money which is tax evaded by businessmen. This is what can be bought back under amnesty.

Now, its not that these businessmen dont pay any taxes at all. These big businesses pay a lot of tax already, but quite a bit is evaded. These monies are invested abroad. How did they manage to evade tax? Loopholes!! Lots of them. As a businessman i can tell you every business utilizes various loopholes in the laws to evade taxes. Doesnt mean they dont pay taxes, but they use the loopholes to pay less. There is not a darn thing that anyone including the best tax official. as the books are cooked using the allowances as laid by the law.

 

[thakur_ritesh]

Ritesh,

There are two parts to the black money thing. One is political money and the other is business money.

Political money is the one which is actually "looted" by means of kick backs. Dont expect this money to ever come back to India under amnesty as well.
The other is business money which is tax evaded by businessmen. This is what can be bought back under amnesty.

Now, its not that these businessmen dont pay any taxes at all. These big businesses pay a lot of tax already, but quite a bit is evaded. These monies are invested abroad. How did they manage to evade tax? Loopholes!! Lots of them. As a businessman i can tell you every business utilizes various loopholes in the laws to evade taxes. Doesnt mean they dont pay taxes, but they use the loopholes to pay less. There is not a darn thing that anyone including the best tax official. as the books are cooked using the allowances as laid by the law.

mate

the answer is very simple. lower the tax rate, 20%, 30% and corporate taxes are ridiculously high. our country literally penalizes us for earning more. the government quite literally questions why do i earn more? and that i have no right to earn that much.

why would a businessman stack his money as black, buy all the headaches possible, if the tax rates were a lot less and he would not feel cheated and looted by the government. there needs to be practical rates in place and that is something the government needs to do. those solutions have to come from the government. they have all the solutions but dont want to implement them.

 

[Daredevil]

Yes, lower the tax rate and you will keep the money within the country and less black money going out of the country. The present tax rates of >30% are ridiculously high for a country where the services provided by it are down right pathetic. Why would any business man would like to pay >30% tax-rate for not getting anything in return from the government - be it better infrastructure, better civic facilities or even efficient bureaucracy where they don't have to grease the palms of every TDH govt. official. 20% tax rate is quite reasonable or provide the best facilities and charge more tax like scandinavian counties do.

 

[Yusuf]

mate

the answer is very simple. lower the tax rate, 20%, 30% and corporate taxes are ridiculously high. our country literally penalizes us for earning more. the government quite literally questions why do i earn more? and that i have no right to earn that much.

why would a businessman stack his money as black, buy all the headaches possible, if the tax rates were a lot less and he would not feel cheated and looted by the government. there needs to be practical rates in place and that is something the government needs to do. those solutions have to come from the government. they have all the solutions but dont want to implement them.

35% flat.. I pay as well as that tax..plus i pay income tax on my own personal earnings.
What you mentioned is a solution in the long run. For now, get the trillion thats outside and forgive. Otherwise that money will never come back. You will never know who has hid what and even if you find out, no one will be able to do a jack sh!t about it because it will involve transnational trail, legal hurdles, technicalities etc.

I think the taxes in India are quite at par with other developed countries. But the problem is that we are not a developed country. We need better tax base. how many of the billion pay and how many can afford to pay. Its a dilemma that will haunt every policy maker in India. We need more money to pay for future funding of development projects. So the only thing that the government does is tax the one already paying. What does that tax payer do? Use the loopholes to save some part of that tax.

You and I are very small players mate. We will not go to jail. Dont worry about it.

 

[Yusuf]

this will help in understanding tax rates in various countries.

Tax rates around the world - Wikipedia, the free encyclopedia

 

[thakur_ritesh]

this will help in understanding tax rates in various countries.

Tax rates around the world - Wikipedia, the free encyclopedia

mate while doing that let us also compare the facilities that you and i enjoy and someone sitting in those developed countries enjoy, in hindi we would term it asmaan zameen ka pharak.

second quite a few countries do a 20% and there about rates, do the same in india, what is stopping?

the most significant difference between them and a country like india is, we today are a hub of economic development and there tremendous wealth creation, which means if there are lesser tax rates people will not feel to stack the money overseas but keep it in india and have a much better return, which means the multiplier effect in india as compared to those countries is many-many times more. now if they lower the tax rates, it means people in indian and overs seas would be that much more interested in investing, means more circulation, means more job creation, means more and more people coming under the tax net, means the over all impact would possibly be the country would then generate more revenue than when the country does with the present high tax rates.

by doing that you are providing that extra boost to everyone. one - no need to throw money away, two- no need to convert money as black, three- invest in india and become a part of all round economic activity.

what is the end result of the present high interest rate? the tax to gdp ratio is a mere 10.3%, and declining, so what is it that we have achieved from such high rates?

 

[thakur_ritesh]

35% flat.. I pay as well as that tax..plus i pay income tax on my own personal earnings.
What you mentioned is a solution in the long run. For now, get the trillion thats outside and forgive. Otherwise that money will never come back. You will never know who has hid what and even if you find out, no one will be able to do a jack sh!t about it because it will involve transnational trail, legal hurdles, technicalities etc.

I think the taxes in India are quite at par with other developed countries. But the problem is that we are not a developed country. We need better tax base. how many of the billion pay and how many can afford to pay. Its a dilemma that will haunt every policy maker in India. We need more money to pay for future funding of development projects. So the only thing that the government does is tax the one already paying. What does that tax payer do? Use the loopholes to save some part of that tax.

You and I are very small players mate. We will not go to jail. Dont worry about it.

there is the answer to technicalities and all the legal battles. legal battles be sorted out from special assigned courts, in time bound fashion.

i have said make the money a national property, tax at 35% given the present rates and pass on the money to people who so ever claims with no prosecution, the money whichever way will be in india without any problems.

there was this story of this individual who landed up in jail on a tax evasion of 20,000rs.

 

[Yusuf]

TR,

Do you propose a reduction in the exempted limit in the tax structure?

Do you know one major problem in India? Illiteracy and lack of knowledge even among the literates.
The cooliewalas working in my area make 15-20k a month. Eligible to be taxed. Do you think they know what tax is? Or do you expect them to pay tax?

Like i said, its a dilemma that haunts every policy maker. How to raise money by taxes.In India, indirect taxes also are pretty high. As with other systems in our country, the taxes too need a major tweak.

Still, this income and corporate tax will always be the bone of contention. As it is a very small percentage of people pay taxes. And this lot will continue to bear the brunt of all such taxes. And this lot will continue to find ways to avoid paying taxes.

 

[Yusuf]

I would say that if corporate taxes are streamlined and made like how personal income tax is, it could probably help.

Say for a turnover of up to 1 Cr=5%
1-5Cr = 10%
5-50Cr=15%
50> 20%

I think, this will take away the incentive to evade. Evading tax is a pain. Trust me, the adjustments done using the loopholes are a fucking pain.
Id rather pay up 10% than avoid that. At 35%, the incentive to evade is higher.

May be if they introduce this slabs, going by my argument, those small businesses who evade taxes altogether, will start to pay. May be the base can be widened. But i dont know. A lot in the country just dont know what tax is. Either too poor, or earn just enough that paying tax means pushing them down.

 

[thakur_ritesh]

TR,

Do you propose a reduction in the exempted limit in the tax structure?

i propose the reduction in tax rates.

slabs then can be redefined because if the higher limit is 20%, then the lower limit wont be 10% but much less, which then can be used to bring in many more services, products which today remain untaxed. why does the government always have to think that if a new service has to be taxed it must be no less than 10%, here was a service that we were not even be taxing all this while. bring them in slowly and dont jump to bigger figures immediatedly. see what is being provided to them in return of that tax collected then increase it slowly so that people get to understand the benefits.

just 3-4% indian population is directly taxed in india.

important is lower the tax rates, and increase the base significantly.

Do you know one major problem in India? Illiteracy and lack of knowledge even among the literates.
The cooliewalas working in my area make 15-20k a month. Eligible to be taxed. Do you think they know what tax is? Or do you expect them to pay tax?

it is not about me expecting or not. educate them, use various means, NGOs, national media, government machinery, post offices, banks, what do they get in turn, how is the same tax beneficial for them, for their families, for their children, how does the government hospitals which helps these people, how will their children get educated who then wont be forced to do those petty jobs, etc.

make it a national movement, an all round effort, why cant we do it, nothing that i see can or should stop them. we will then not see a tremendous increase in the tax base over the years, i am sure we will.

people today are most scared of interacting with the sarkari karamchari, finds ways to by-pass them, us IT to what ever extent possible.

 

[Yusuf]

i propose the reduction in tax rates.

slabs then can be redefined because if the higher limit is 20%, then the lower limit wont be 10% but much less, which then can be used to bring in many more services, products which today remain untaxed. why does the government always have to think that if a new service has to be taxed it must be no less than 10%, here was a service that we were not even be taxing all this while. bring them in slowly and dont jump to bigger figures immediatedly. see what is being provided to them in return of that tax collected then increase it slowly so that people get to understand the benefits.

just 3-4% indian population is directly taxed in india.

important is lower the tax rates, and increase the base significantly.



it is not about me expecting or not. educate them, use various means, NGOs, national media, government machinery, post offices, banks, what do they get in turn, how is the same tax beneficial for them, for their families, for their children, how does the government hospitals which helps these people, how will their children get educated who then wont be forced to do those petty jobs, etc.

make it a national movement, an all round effort, why cant we do it, nothing that i see can or should stop them. we will then not see a tremendous increase in the tax base over the years, i am sure we will.

people today are most scared of interacting with the sarkari karamchari, finds ways to by-pass them, us IT to what ever extent possible.

The cooliewala is not going to understand why he should part with his hard earned money. Very difficult. When people with way lot money than all of us here put together evade, i dont expect the cooliewala to understand why he should pay about 2000 in tax a year.