Tax Ad­ven­tur­ism will Prove Costly for Evaders: Jait­ley

The Economic Times - - Economy - Our Bureau

New Delhi: Finance min­is­ter Arun Jait­ley has said be­cause of global ef­forts trans­parency was in­creas­ing, warn­ing of costly con­se­quences for any­one try­ing to evade taxes, re­fer­ring to the Panama Pa­pers that showed pos­si­ble tax eva­sion through off­shore en­ti­ties by peo­ple across coun­tries.

“This is a stern re­minder to all of us that with the G20 ini­tia­tives, FATCA (For­eign Ac­count Tax Com­pli­ance Act) and bi­lat­eral trans­ac­tions in place with ef­fect from 2017, the world is go­ing to be a far more trans­par­ent in­sti­tu­tion and, there­fore, this kind of an ad­ven­tur­ism will prove to be ex­tremely costly for those who have in­dulged in it,” Jait­ley said, ad­dress­ing the an­nual ses­sion of in­dus­try body CII. The NDA gov­ern­ment has al­ready passed a strict law to dis­cour­age for­eign black money, pre­scrib­ing im­pris­on­ment of up to 10 years and ef­fec­tive con­fis­ca­tion of undis­closed as­set.

The law gave past of­fend­ers one last chance to come clean through one-time com­pli­ance win­dow of three months that ended on Septem­ber 2015. “I had come in for some ad­verse com­ment in­clud­ing by some of my friends here when in 2015 Bud­get we had an­nounced a strong pe­nal law against il­le­gal as­sets abroad. At that stage I had said that those who com­mit­ted this mis­takes in the past are get­ting one last op­por­tu­nity with a com­pli­ance win­dow in place,” FM said in­di­cat­ing how things could get dif­fi­cult for those who have not come clean with in­for­ma­tion in­flow in­creas­ing. “The com­pli­ance win­dow op­er­ated, many availed of it but prob­a­bly some didn’t,” he said. Dur­ing the pe­riod the gov­ern­ment re­ceived 644 dec­la­ra­tions in­volv­ing undis­closed for­eign as­sets worth .₹ 4,164 crore

Those want­ing to come clean were re­quired to pay 30% tax and 30% penalty. FATCA was en­acted by the US in 2010 as part of the Hir­ing In­cen­tives to Re­store Em­ploy­ment (HIRE) Act to com­bat tax eva­sion by US na­tion­als hold­ing in­vest­ments in off­shore ac­counts.

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