Squeeze out black money... but not in a harsh way: FM
Finance Minister Arun Jaitley on Monday asked taxmen to squeeze the parallel economy but gave an assurance that while doing so honest taxpayers may have nothing to fear about the new black money law. “The parallel economy has to be squeezed...and (it) has to be done in <g data-gr-id="65">very</g> fair manner, not in a harsh manner. In doing so, as senior officers you have to... maintain the highest standard of integrity,” he said while addressing a conference of top officials of the Central Board of Direct Taxes.
On the new black money law, Jaitley said, “No honest taxpayer has anything to fear. It’s targeted only against those who have stashed assets abroad.” The minister further told the tax officers, “Every <g data-gr-id="37">well meaning</g> advisor will tell you, <g data-gr-id="56">tax</g> base has to be expanded. Black money has to be squeezed out and at the same time if you take steps to do that, you have to listen to the taunt of draconian steps which are being taken.”
The government, the minister said, has taken a host of measures to curb the menace of black money. These include passage of the black money law by Parliament and introduction of Benami Transactions (Prohibition) bill to deal with the unaccounted domestic wealth. “Black money has to be squeezed”, he said, adding only those who have defied the system in the past and intend to defy the compliance window to come clean have to worry. Jaitley further said that improvement in tax collection will increase the ability of the government to step up spending on social and infrastructure projects and provide relief to individual taxpayers. For the current financial year, the minister said, direct tax collection was likely to improve by 14-15 per cent and there was <g data-gr-id="69">possibility</g> of <g data-gr-id="70">government</g> improving upon the fiscal deficit target of 3.9 <g data-gr-id="53">per cent</g>.
However, he added that the government would prefer to increase expenditure on social sector schemes instead of improving its fiscal deficit target. The objective is not to better fiscal deficit number, he said, adding, “...we want to increase expenditure because increased expenditure leads to growth.”
“We would like larger revenue collections to be invested in areas of infrastructure, irrigation, in the social sectors to bring larger dividends back to the economy.” As regards black money, the Finance Minister said that several steps have been announced and the government would come out with more measures in future to squeeze the quantum of illicit wealth.
“There are steps which have been announced and some may be announced in future, with regard to squeezing quantum of black money. “If the base increases, collection increases and those who have to pay taxation are compelled to pay it, the ability of government to give concession, in terms of rates to honest <g data-gr-id="67">tax payers</g> also increases,” he added. Observing that there are no grey areas in taxation, the Finance Minister said, “Either a tax is payable or it’s not payable. If it’s not <g data-gr-id="68">payble</g> no attempt has to be made to recover it but if it is payable then there is no scope for any other collateral consideration why it must not be recovered for the government.”
The policy has to be “crystal clear” that nobody should be harassed, but the evader must not succeed, he said, adding “within the parameters of the policy we continue to do our job...a very unenviable job.”
The Government, Jaitley said, has already taken various initiatives on the taxation front which include roll out of the Goods and Services Tax (GST), reduction of corporate tax rate from 30 per cent to 25 per cent over the next four years and removal of exemptions to the extent possible.
As regards indirect taxes, Jaitley said, “The process of introduction of GST is on. A lot of work has been done, a lot of work remains to be done and we have only <g data-gr-id="35">few months</g> to accomplish the task.”