JOIN USGovernment tables white paper on black money
The government on Monday tabled the White Paper on black money in Lok Sabha, dealing at length with ways to disincentivise its generation and sought to put in place necessary framework to deal with the menace.
“Institutions of the Lokpal and Lokayukta need to be put in place at the earliest, in the Centre and states respectively, to expedite investigations into cases of corruption and bring the guilty to justice...,” the 97-page document, tabled by Finance Minister Pranab Mukherjee in the Lok Sabha, said. The Bill has been passed by the Lok Sabha but still awaits its passage in the Rajya Sabha.
Contending that cash has always been a facilitator of black money since transactions made in cash do not leave any audit trail, the White Paper talked about tax breaks on the use of credit and debit cards. The practice is in vogue in Republic of Korea. It also sought an improvement in reporting and monitoring systems in the bullion and jewellery sector, notorious for generation and consumption of black money. To curb black money in the real estate sector, accounting for 11 per cent of the country’s economy, the paper suggested development of a nationwide data base, introduction of tax deduction at source on sale of property and setting up of electronic payment mechanism.
Source of information
On repatriation of black money stashed abroad, it underlined the need to expand the legal framework of Double Taxation Avoidance Agreements (DTAA) and tax information treaties with the countries. The paper said in last few years it has been a very useful source of information. It also sought strict follow-up action from the government against tax evaders.
The paper also talked about rationalisation of tax rates and strengthening of tax administration as the fundamental and core strategies for curbing black money and tax evasion.
Another major step to deal with black money, according to the paper, is the introduction of GST, which simplifies the tax structure and enhances compliance. The document also sought to put to rest finance ministry’s intention to recover tax dues from UK-based telecom operator Vodafone and named it a key culprit for large scale tax evasion in India.