Strengthen laws to tackle black money
The ghost of black money has come back to haunt the government with over Rs one lakh crore freshly detected in the illegal capital circuit, raising more concerns in a severely fiscally-challenged environment. Staggering amount of undisclosed income and unpaid taxes have further crunched the already stifled revenue stream, with the corporate behemoths amongst the biggest tax and dues defaulters, causing losses to the tunes of hundreds of crores to the government exchequer. Recent I-T department data has not only indicated that black money has doubled in the last fiscal, it has also shown that business firms, corporate and private financial institutions continue to indulge in tax evasion at unsustainable and greatly endangering levels. In addition, seized assets like jewellery, fixed deposits and cold cash worth hundreds of crores point to the fact that corruption has hardly come down despite the brouhaha over the issue that cost the UPA regime power in the centre in the April-May general elections. While the previous government had dabbled with debating measures, including tabling the White Paper on black money in May 2012 in Parliament, there was hardly any concrete steps taken to ensure that the problem is nipped in the bud. While voluntary disclosures of income, spreading awareness on the importance of paying taxes, are important, the problem of stashing the money in a Swiss bank has escalated in the recent times. Even the BJP poll promise of bring back black money and its subsequent negotiations with Switzerland after took charge at the centre haven’t yielded much.
What must be done urgently is figuring out the exact scale of the black market economy and how much it dents the regular economy. Strict actions against perpetrators of income tax crimes, such as fraudulent transfers, money laundering, incorrect disclosures, hoarding in cash and gold, creating revenue bottlenecks and conniving with bureaucrats to get away with tax evasion, must be undertaken. Moreover, certain sectors like real estate, cigarettes and tobacco product industry, high-end fashion, cosmetics, high dining, luxury and imported automobiles, should be concurrently taxed as well, so as to minimise revenue loss to the government. In addition, while streamlining the tax structure and giving more tax breaks for middle classes would ensure greater transparency, bolstering legal edifice is a must.