Emails (Others): Making India a Tax Haven ?

Making India a Tax Haven ?

Yesterday's leak / report " PANAMA PAPERS ", revealed that some 500 Indians have stashed away abroad , billions of dollars worth of " Undisclosed Assets " , courtesy Mossack Fonseca of Panama , a money laundering law firm with staff of 600 , operating in 42 countries and having a client-base of 300,000

Now Panama is not the only tax haven on earth

There are others such as Switzerland , Cyprus, British Virgin Islands , the Isle of Man , Guernsey , Jersey etc

Nor is Mossack Fonseca the only money launderer. It is only the 4th biggest

Acting unusually fast , Union Government has set up a multi-agency group to investigate and bring to book , the suspected Indian tax evaders

While wishing all luck to this Group , we cannot overlook the terribly disappointing results of the Supreme Court monitored SIT , during the past 16 months ( viz: discovery of illegal assets worth around Rs 6500 Crore )

Experts are clamoring :

* Tighten existing laws

* Make illegal , anonymous investments ( eg: Participatory Notes )

* Pass law to declare all undisclosed foreign assets as " National Property "

MY SUGGESTION :

* If you cannot lick them , join them !

* Abolish Personal Income Tax

* And , instead of a Tax Return , every existing tax payer ( approx , 4 cr )

to file , annual DECLARATION OF ASSETS ( Movable and Immovable )

* Introduce Amnesty Scheme under which , no questions will be asked as

to the source of any amount of CASH deposited in a person's SPV

INFRASTRUCTURE account ( at any local Indian bank of his choice )

* Encourage those 500 Indians to liquidate those Undisclosed Assets

abroad and deposit that CASH in SPV INFRASTRUCTURE accounts

Of course , all Indian citizens can do likewise !

* SPV INFRASTRUCTURE accounts can be used ONLY for investing in

government approved Infrastructure Funds ( especially funds devoted

to Renewable Energy / Swatchh Bharat / Health / Education / Homes

costing less than Rs 5 lakhs , etc )

* Make India a Tax Haven of sorts !

By no stretch of imagination , I am suggesting that India becomes a destination for parking

* Drug Mafia money

* Terrorist Money

* Bribe Money for international purchase contracts ( defense etc)

All I am saying is :

* Take away incentive to evade taxes , thereby stopping future generation

of Black Money

* Channel all existing Black Money ( locked up in assets , in India or

abroad ) into the main stream of economy ( Infrastructure Building )

* Enable current annual inflow of inward remittances from overseas

Indians to go up from $ 70 Billion to $ 700 Billion

* Through rapid development of Infrastructure , generate Self

Employment for 12 million youth every year

* Drastically reduce FDI requirement for rapid growth of economy

* By cutting down on government outlay for Infrastructure , reduce govt

borrowing from market and consequent debt servicing

* Raise GDP to 10 % by 2018

It is time to stop tinkering when govt has miserably failed to bring out black money stashed abroad (or locally) , nor succeeded in stopping future generation of Black Money

It was good that the NDA Government raised the expectations of citizens

Now , it is time to deliver on those expectations before Assembly Elections get over in 5 States

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www.hemenparekh.in / blogs

05 April 2016

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