In­di­ans de­clare US$500 mil. in black money in tax crack­down

The China Post - - LIFE GUIDE POST -

In­di­ans de­clared US$500 mil­lion in black money, the gov­ern­ment an­nounced Thurs­day, a frac­tion of the to­tal amount feared hid­den, as a dead­line for cough­ing up as­sets hid­den from the tax­man ex­pired.

Prime Min­is­ter Naren­dra Modi took power last year pledg­ing to crack down on black money, a sys­temic prob­lem in In­dia that sees bil­lions of ru­pees hid­den in for­eign bank ac­counts or fun­neled into prop­erty abroad.

The fi­nance min­istry said more than 600 tax evaders had made dec­la­ra­tions by mid­night on Wed­nes­day — when a three-month win­dow for un­veil­ing stashes and avoid­ing pros­e­cu­tion ended.

The min­istry said “638 num­ber of dec­la­ra­tions have been re­ceived un­der the com­pli­ance win­dow declar­ing undis­closed for­eign as­sets,” amount­ing to 37.7 bil­lion ru­pees (US$574 mil­lion).

The gov­ern­ment has an­nounced a string of mea­sures to crack down on black money, in­clud­ing a 10-year jail term for evaders who get caught from now on.

But Ashutosh Ku­mar Mishra, ex­ec­u­tive di­rec­tor of Trans­parency In­ter­na­tional in In­dia, doubted whether the gov­ern­ment could find the money off­shore given how deeply en­trenched the phe­nom­e­non has be­come.

“It’s not easy. You need a set of clear re­forms and de­ter­mined po­lit­i­cal will and it will take years,” Mishra told AFP.

In­dia is one of the most cash-in­ten­sive so­ci­eties in the world, cor­rup­tion is en­demic, and strict tax laws en­cour­age peo­ple to keep money off the of­fi­cial books.

Es­ti­mates of In­dian black money abroad vary. Some US$439 bil­lion left the coun­try il­lic­itly from 2003-2012, ac­cord­ing to es­ti­mates from the Global Fi­nan­cial In­tegrity group in Washington.

The wealthy chan­nel money to tax havens such as Switzer­land or Sin­ga­pore, con­vert it into jew­elry, an­tiques, paint­ings or prop­erty or send a rel­a­tive abroad for half the year to avoid tax.

Only 2.89 per­cent of In­di­ans pay any in­come tax at all, In­dia’s pre­vi­ous fi­nance min­is­ter told par­lia­ment in 2013.

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