Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Friday 8 April 2016

RE: Short-Circuiting of Round-Tripping !


Thanks, RK

Warm Regards,

Hemen Parekh
(M)=91 – 98,67,55,08,08

From: RAJKUMAR SETH [mailto:rks_mayur@hotmail.com]
Sent: Friday, April 08, 2016 2:23 PM
To: hcp@recruitguru.com
Subject: RE: Short-Circuiting of Round-Tripping !

Have already shared it with my IITK community.
Regards
R K Seth

From: hcp@recruitguru.com
Date: Fri, 8 Apr 2016 10:59:37 +0530
Subject: RE: Short-Circuiting of Round-Tripping !
To: rks_mayur@hotmail.com
RK,

Thanks

Now help me spread the good words !

Warm Regards,

Hemen Parekh
(M)=91 – 98,67,55,08,08


HCP

Excellent write-up & analysis.
Thanks

Regards
R K Seth

Short-Circuiting  of  Round-Tripping   !

What is Round Tripping ?

Black Money sent to tax havens ( eg: Panama ) for laundering and which returns to the country of origin as White Money , in the form of investments

What is the Global Amount  ?

Approx $ 23 Trillion ( China's GDP is about $ 17 Trillion )

What is the mechanism ?

In India , it is LRS ( Liberalized Remittance Scheme ), under which any Indian ( including minors ! ) can remit abroad officially / legally , EVERY YEAR , $ 250,000 for any of the following reasons (and without prior RBI permission ! ) :

*  Under Current Account
   #  Medical Treatment
   #   Education

*  Under Capital Account
   #  Buying Property overseas
   #  Holding shares in an overseas company
   #  Combination of these two

What is the safeguard  ?

Details of foreign assets have to be declared in the Income Tax Returns

How black money gets sent to tax havens ?

Some amount by Hawala route but most by legitimate banking channels !

You don't see plane-loads of cash landing in Panama !

Does that mean Indian Banks are party to these ?

Without doubt ! They will advise you how to do this ! Of course, legally !

If these remittances are legal, will 500 Indians get jail ?

Forget it !

Most legal experts say , they will be let off with some fines , if they have failed to declare these assets in IT returns

Are laws designed so as to prevent Round Tripping ?

Far from that ! Here is what President Obama said yesterday :

" There is no doubt that the problem of global tax avoidance generally is a huge problem

The problem is that a lot of this stuff is legal , not illegal

We shouldn't make it legal to engage in transactions just to avoid taxes

A lot of these loopholes come at the expense of middle class families
Alternatively , it means that we are not investing as much as we should in schools , in making college more affordable, in putting people back to work rebuilding roads, our bridges, our infrastructure , creating more opportunities for our children  "

What  is  the  best  SOLUTION ?

Make it unnecessary for our Black Money to first travel abroad ( to tax havens ) , before returning ( as White Money ) and getting invested in capital market

Short-circuit the Round Trip by enabling our Black Money to become White Money , HERE  itself ( no need for help from Mossack Fonseca ! )

As suggested in my recent blog ( Make India a Tax Haven ? ), abolish Personal Income Tax ( remove incentive for tax evasion )

Enable direct investment of " Black-turned-White " money into government approved INFRASTRUCTURE BONDS , thru creation of designated bank accounts where Black Money can be deposited , without any questions asked

Obviously , interest / dividend earned from such investments will be tax
free , being Personal Income  !

Is this a practical solution ?

Not if you ask the Economists / Bankers etc

Just ask the man on the street  !

This is a too serious matter to be left to the Experts !

Will such a bill pass the legislative muster ?

Rahul Gandhi promised to pass the GST bill in 15 minutes if amendments proposed by Congress get incorporated

" Short-circuiting of Round-Tripping Bill " will get passed in 5 minutes - and unanimously too !  You know why !

---------------------------------------------------------------------------------


08  April  2016




Warm Regards,

Hemen Parekh

(M)=91 – 98,67,55,08,08

From: Hemen Parekh [mailto:hcp@recruitguru.com]
Sent: Tuesday, April 05, 2016 11:52 AM
To: Hemen Parekh; 'shaktikanta.das@nic.in'; 'narendramodi1234@gmail.com'
Cc: 'Hasmukh Adhia'; 'ajaitley@del5.vsnl.net.in'; 'jayant.sinha19@sansad.nic.in'; 'piyush.goyal@gov.in'; 'nitin.gadkari@nic.in'; 'spprabhu1@rediffmail.com'; 'kalraj@kalrajmishra.com'; 'bandaru@sansad.nic.in'; 'amitabh.kant@nic.in'; 'smritizirani@nic.in'; 'nsitharaman@nic.in'; 'nandan@nandannilekani.in'; 'viral@juliacomputing.com'; Editors; L T Story; Loksabha1; Loksabha2; Rajyasabha; TV Anchors; 'ceo-niti@gov.in'; 'secy-ipp@nic.in'; 'mcitoffice@gov.in'; 'ravis@sansad.nic.in'; 'sureshprabhu@irctc.co.in'; 'prakash.j@sansad.nic.in'; Business Leader
Subject: 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

-------------------------------------------------------------------------------------


05  April  2016

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hemen  parekh


Marol , Mumbai , India


( M ) +91 - 98,67,55,08,08

 


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