Is there a magic wand with which India can
Bring back black money stashed abroad
Stop generation of further tax evasion
Prime Minister Man Mohan Singh says, “ No “.
He is an eminent economist and he should know.
But let him at least consider following :
For the past tax evaders
• Without asking any questions as to the source of their funds, let them bring in those black monies stashed abroad and invest into Government approved “ Infrastructure Bonds / SPVs “.
• They can take out these monies only after 15 years
• During this period, they will not get any profit / interest / dividend etc from their investments. This “deprivation” becomes their only penalty.
* All the profits earned by these Bonds/SPVs, to be deposited into a “ Honest Tax Payers Tax Reduction Account” (HTPTRA), held by Government.
* During these 15 years, they will continue to pay their income tax on their other incomes @ 35 % normal rate
For the honest tax payers
• The amount deposited into HTPTRA to be used to bring down the maximum tax rate payable by the honest tax payers. The reduction could be 1% – 2% per year, till the maximum payable tax rate is brought down to 15 %
• This will be a “ Reward “ to the honest tax payers and will discourage tax evasion.
I am not suggesting this as a some kind of substitute for tax-evasion treaties to be signed with all the countries.
But to tackle this issue, we also need a permanent / structural / internal / motivational mechanism as well.
With a maximum personal income-tax rate of 15 %, Singapore has no black-money problem !
There may be a Magic Wand after all !
With regards
Hemen Parekh
Bring back black money stashed abroad
Stop generation of further tax evasion
Prime Minister Man Mohan Singh says, “ No “.
He is an eminent economist and he should know.
But let him at least consider following :
For the past tax evaders
• Without asking any questions as to the source of their funds, let them bring in those black monies stashed abroad and invest into Government approved “ Infrastructure Bonds / SPVs “.
• They can take out these monies only after 15 years
• During this period, they will not get any profit / interest / dividend etc from their investments. This “deprivation” becomes their only penalty.
* All the profits earned by these Bonds/SPVs, to be deposited into a “ Honest Tax Payers Tax Reduction Account” (HTPTRA), held by Government.
* During these 15 years, they will continue to pay their income tax on their other incomes @ 35 % normal rate
For the honest tax payers
• The amount deposited into HTPTRA to be used to bring down the maximum tax rate payable by the honest tax payers. The reduction could be 1% – 2% per year, till the maximum payable tax rate is brought down to 15 %
• This will be a “ Reward “ to the honest tax payers and will discourage tax evasion.
I am not suggesting this as a some kind of substitute for tax-evasion treaties to be signed with all the countries.
But to tackle this issue, we also need a permanent / structural / internal / motivational mechanism as well.
With a maximum personal income-tax rate of 15 %, Singapore has no black-money problem !
There may be a Magic Wand after all !
With regards
Hemen Parekh
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