Warning corporates not to take unfair advantage of the liberalised tax environment, Finance Minister Arun Jaitley on Friday said the world is moving towards a more transparent regime that would remove the veil of secrecy from unlawful transactions.
“I think, for every assessee, every person in the commercial business also, it is a judgement call that in a liberal economic environment of reasonable and lower taxation rates, ‘go straight’,” he said at the foundation day celebrations of the Enforcement Directorate.
“And, therefore, if you transact within the limits of law, it is much safer. If you breach it, gone are the days where offences would go undetected.” Jaitley also said that the G20 group of countries’ initiative on automatic transmission of information will make every monetary transaction transparent by 2017.
“Each country would go out of the way to cooperate with others. The Americans have particularly taken a strong initiative in their domestic law. They want every country to sign an arrangement with them with regard to the transmission of information,” he said.
“Both these arrangements, by 2017, are going to make extremely risky for anybody to have unlawful assets or unlawful transaction of money. We, in India, have to prepare our people for that,” he added. Last month in Washington, Jaitley sought urgent implementation of the automatic exchange of financial account information.
“We strongly feel that there is a need to ensure that the common reporting standards on automatic exchange of information should be implemented on a fully reciprocal global basis,” he said at the weekend’s annual Spring Meeting of the International Monetary Fund and the World Bank.
“… and those countries which have not yet committed to the timeline of 2017 or 2018 should do it without any further delay.”
At the G20 Brisbane summit last November, leaders endorsed a new global transparency standard by which more than 90 jurisdictions will begin automatic exchange of tax information using a common reporting standard by 2017-18.
In this connection, Jaitely said on Friday that the Income Tax department had filed 121 cases of prosecution against those entities whose names have appeared in the HSBC Geneva bank list.
“If I understand correctly, the assessment of 100 of those cases has been completed and 121 prosecutions have been filed by the tax department against those who were caught with the accounts abroad,” he said.
A senior official told the 121 cases were filed before the March 31 deadline after which these cases would have become time-barred and thus could not be prosecuted by the department.
Jaitley, who said he would move the Undisclosed Foreign Income and Assets (Imposition of New Tax) Bill, 2015, in Lok Sabha next week, recently said the government had completed an assessment of 350 foreign accounts and tax evasion proceedings had been initiated against 60 of the account holders.
India has no official estimate of illegal money stashed away overseas, but unofficial assessments put it somewhere between $466 billion and $1.4 trillion. Expressing concerns over the volatility of the rupee, the finance minister also said India’s currency has remained stable against the US dollar in the last few months mainly because of its forex reserves.
“India’s forex reserves and laws to avert flight of currency have supported the rupee,” he said. “One of the reasons is our foreign reserve is in order and our ability to have deterrent in the system against the unlawful flight of foreign currency,” he added. India’s forex reserves rose $1.4 billion in the week ended April 24 to touch $344.6 billion, creating a new record. (IANS)