Need clear tax laws to prevent black money creation: Niti Aayog chief
5 Dec 2016 10:14 PM GMT
Terming taxation laws in the country as “ill-defined”, Niti Aayog vice-chairman Arvind Panagariya on Sunday called for removing ambiguities in them so as to do away with “discretion of the tax officer”.
He also said that demonetisation of high value currency is just one step to combat black money, and more needs to be done. “Tax reform is really important to curb black money,” he said at a panel discussion here.
“More simplification means reduction and presumably elimination of the many exemptions under the existing laws. Also, we need to spell out many of these rules and laws explicitly. In our case the tax laws are often ill-defined. That of course leads to scope for discretions,” he added.
He said tax reforms like reduction in stamp duty are necessary to stop generation of black money in the system and that this should be done at the earliest following the demonetisation of high value banknotes.
“Demonetisation is one of the steps to stop creation of black money but a lot more needs to be done,” said the academic-turned planner.
Underlining the need for removing ambiguities in tax laws, he said: “We have to go back, start looking at those tax laws, if there is a way to make them precise enough so that it is not left to the discretion of the tax officer but the law itself is clear enough that the taxpayer can figure out rather than having to negotiate with the tax officer.”
Calling for the need to bring in reforms related to stamp duties to stop black money, Panagariya said: “Stamp duties vary widely across the states and there is need to look at that. If you keep the stamp duties too high, that encourages under the table real estate transactions.”
Panagariya said demonetisation was not done completely out of the blue but it was part of the Prime Minister’s promise to combat corruption.
This was preceded by at least half-a-dozen steps against corruption such as appointing SIT (after the Supreme Court asked it to do) to probe black money stashed away aboard, an income disclosure scheme that ended on September 30 and amendments to the Benami Property Act, he said.
On the impact of notes ban on growth, he admitted that there have been some dislocation in the short term but he was quick to add that some dataprints suggest that industrial activity is rising.
Despite many economists suggesting that the government’s claim of a bounty has not fructified, with close to Rs 11 trillion (Rs 11 lakh crore) of the Rs 14 trillion of banned money already reaching bank accounts, he claimed that demonetisation will translate into a lot of extra revenue for the government.
He also called for creating an ecosystem in which the labour-intensive industry can flourish and hoped that the proposed coastal employment zones may play an important role in creating such an environment.
Micro-ATMs, POS asked to guard against cyber attacks post note ban
With the usage of micro-ATMs and POS counters witnessing a sharp surge post demonetisation, the country's premier cyber security agency CERT-In has cautioned customers, bankers and traders against skimming and malware attacks on these systems and asked them to adopt high-end encryption to plug possible breaches.
The CERT-In, nodal agency to combat hacking, phishing attacks and to fortify security-related defences of the Indian Internet domain, has issued two specific advisories for micro ATMs and Point of Sale (POS) terminals. The advisory states that as micro-ATMs work with minimal power and connect to central banking servers through a GPRS network, their security features need to be strong and updated to check attempts by hackers who stealthily plan to steal private customer and bank data which leads to loss of their hard earned money by way of hacking or electronic stealing.
"Traditionally, data input into the POS system is in memory in clear text which allows attackers, memory scrapers to be very successful.
"The way to minimise this risk is by encrypting the card data as soon as possible and keeping it encrypted to the maximum extent throughout its life within the system. Point to Point Encryption (P2PE) could be used to address the issue of encrypting data in memory," the advisory, accessed by PTI, said.
It explains that skimming is the theft of classified credit/debit card data. "A thief can obtain the victim's credit card number using a small electronic device near the card acceptance slot and store hundreds of victims' credit card numbers," it said.
A social engineering attack can be engineered at these facilities, it added, by gaining trust of the owner as the fraudster poses as a member of staff.
"The fraudster would then ask the customer to check the card for damages. The fraudster would have gained confidence from his prey using various
tactics such as offering assistance to the customer who perhaps would have tried to use the ATM without success or perhaps the customer who is not familiar with use of micro ATM machine and requires assistance," it said.
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