‘Black money is not just a tax issue’ – Prof R Vaidyanathan

Shame them! Black money held abroad is not just a tax issue

by

Prof R,Vaidyanathan, IIM, Bangalore

A recent report in The Economic Times suggests that the income tax department has secured at least 17 "voluntary disclosures" from around 700 Indians who are alleged to have had secret accounts with the HSBC Bank in Switzerland.

 

Says the report: "The amount disclosed ranges from Rs 50 crore to Rs 300 crore. Many in the list have opted to file 'revised return'  — a procedure allowed under the Income Tax Act for taxpayers who think they made a mistake while filing the original return. Revised returns are usually filed within a year of filing the original. The IT department has chosen to summon the alleged evaders and ask them to declare their undisclosed offshore deposits rather than initiate prosecution proceedings."

 

According to the newspaper, this has been done for two reasons. One, the tax department does not have enough manpower to go after all the 700. Moreover, since the HSBC names are from a stolen list, the department is "not in a position" to verify it. "Such a list has to be certified by the Swiss authorities before it can be used as evidence in any court of law. Both the tax office and taxpayers are in a tricky situation."

 

If this report is right, it reveals two things regarding this government — its duplicity and lies pertaining to the data and also its audaciousness in treating illegal money abroad as simply a revised income tax return issue.

 

First, the duplicity. The government has always maintained that since this data has been obtained under double taxation treaties, the names cannot be revealed. Now it says since it is stolen data it is not possible to verify with the banks. Stolen data does not come under any double tax treaty. More important is the fact that the government is trying to treat the whole issue as a minor issue and ask the criminals to file revised returns. It is like administering a slap on the wrist for murder.

 

The government is also claiming that the names will be released once the prosecution starts. But the newspaper report suggests that the government is trying its best to settle all issues by collecting some tax since prosecution can be painful and expensive. It also suggests that the government does not have manpower.

 

When the floodgates open and hundreds of thousands of names get revealed will the government just keep quiet due to lack of manpower? One hopes the police and other departments do not follow this logic to wink at crimes due to lack of manpower.

 

What are the real issues in these illegal funds abroad?

Read the full story  at

http://www.firstpost.com/economy/shame-them-black-money-held-abroad-is-not-just-a-tax-issue-145692.html