In­di­ans dis­close US$10 bil­lion in hid­den wealth

The Myanmar Times - - International Business -

IN­DI­ANS have de­clared al­most US$10 bil­lion in hid­den wealth un­der a govern­ment amnesty on tax eva­sion, as part of Prime Min­is­ter Naren­dra Modi’s moves to crack down on huge piles of black money.

Fi­nance Min­is­ter Arun Jait­ley said the four-month scheme that closed on Septem­ber 30 had re­sulted in 64,275 dec­la­ra­tions of pre­vi­ously undis­closed as­sets and in­come, to­tal­ing 652.5 bil­lion ru­pees ($9.8 bil­lion).

“With so many peo­ple declar­ing money it shows a sig­nif­i­cant num­ber of peo­ple want to be­come tax com­pli­ant,” Mr Jait­ley told re­porters.

“This fig­ure could be re­vised up­ward once the fi­nal tab­u­la­tion is done,” the min­is­ter said, adding that the ad­di­tional rev­enue would help fund pub­lic wel­fare schemes.

In­dia’s tax­pay­ers are star­tlingly few, with only around 2.5 per­cent of its 1.2 bil­lion pop­u­la­tion fil­ing re­turns – largely be­cause the so­called un­or­gan­ised sec­tor em­ploys so many peo­ple who are paid cash.

Mr Modi vowed to crack down on tax avoid­ance to tackle the coun­try’s yawn­ing in­equal­ity af­ter storm­ing to power at elec­tions in 2014.

His govern­ment in­tro­duced a slew of rules this year in­clud­ing mak­ing it manda­tory to de­clare a unique tax­payer num­ber when pur­chas­ing goods over 200,000 ru­pees.

Un­der the scheme, au­thor­i­ties promised not to pur­sue In­di­ans in re­turn for com­ing clean on hid­den wealth and pay­ing tax on it.

But ac­coun­tants and other experts re­mained scep­ti­cal about whether In­di­ans would cough up their wealth. The govern­ment did not an­nounce a pub­lic tar­get for the ini­tia­tive.

Across all lev­els of so­ci­ety, round­ing up tax is dif­fi­cult when dodg­ing it is prac­ti­cally a na­tional sport, from small-time land­lords who re­quest rent in cash to large-scale money laun­der­ing via state lot­ter­ies.

Only six peo­ple earn­ing over 500 mil­lion ru­pees ($7.4 mil­lion) filed re­turns in 2012-13 de­spite there being an es­ti­mated 2100 ul­tra-wealthy In­di­ans whose net worth ex­ceeds $50 mil­lion.

Bil­lions of dol­lars in un­paid taxes de­prive the govern­ment of rev­enues that could be spent on chang­ing lives in a coun­try where 270 mil­lion peo­ple survive on less than $2 a day, ac­cord­ing to the World Bank. –

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