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

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www.hemenparekh.in / blogs

05  April  2016

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Electoral Reforms Through Backdoor ?

While refusing to entertain a PIL of eminent citizens seeking direction to Election Commission to verify details of persons contesting polls , the Supreme Court remarked :

"  It was for Parliament to act, as the court cannot ask the Election Commission to undertake this exercise

How do you expect the Election Commission to go on verifying details of thousands and thousands of candidates ? The task of verifying details including assets of candidates is cumbersome

The election reforms are long awaited . Only they ( legislature ) can make law , but we know that they will not do this

Persuade them ( Election Commission ) , outside the court . Let us see how they respond  "

I get a feeling that Shri Arun Jaitleyji and the Income Tax Department overheard the honorable judges of the Supreme Court !

For 2016-17 assessment year, the tax department has unveiled new income tax return form

For persons with income above Rs 50 lakhs, it requires submission of following details ( with cost of each item ) :

*  All immovable assets ( such as land / buildings etc )

*  All movable assets ( such as Cash, Jewellery , Vehicles , Yachts etc )

*  All liabilities ( such as loans )

Here is what the Election Commission should do next :

*  Insist that each and every contestant files along with his / her nomination

    affidavit , copies of his / her income tax returns for past 3 years

That still leaves the question of " Verification "

Answer :

Alternative # 1 :

Using " Sampling Technique ", randomly select 10 % of the contestants and ask Income Tax authorities to verify their assets / liabilities

Alternative # 2 :

Select ( for verification ) those contestants , whose incomes have grown by more than 25 % over the past 3 returns

Electoral Reforms is merely a question of necessary " Will " on part of the Administrative wing

But even there , do not expect much when bureaucrats and ministers themselves , fail to submit their Assets Declarations to PM every year !

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www.hemenparekh.in / blogs

04  April  2016

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Burden of School Bags

A recent survey of 4569 students in Mumbai found :

*  31 % of those surveyed, carried schoolbags weighing more than the prescribed limit ( not more than 10% of child's own weight )

This issue has so much agitated everyone that even the Mumbai High Court keeps asking the Government :

"  What are you doing about this ? How and when , do you expect to solve this problem ? "

A news report in Times of India ( 02 April , 2016 ) quotes Shri B B Chavan , Deputy Director of Education , as follows :

"  Schools can't do much if parents continue to send fancy bags, heavy tiffin boxes and water bottles and tuition books "

Sure , parents can help reduce their child's burden

But , so can progressive / forward thinking / innovative schools  !

Immediate answer that comes to mind is : Use of Internet

I believe , HRD Ministry has launched a project under which , all text books will get uploaded on its web site , which any student can access freely , at any time , on his / her tablet

Simultaneously , in the last 2 / 3 years , dozens of portals have come up , which provide educational content of all kinds ( text books / quizzes / test papers / assessments etc ) , online , for a reasonable annual subscription

But the problem is :

*    Very few schools have a Wi-Fi hot spot

I suppose , it will take a few years before all schools get internet connection

Interim solution :

*   Schools to make available to students ( of each standard ) , tablets

     having on-board storage memory of 64 GB ( no need for internet ! )

*   Each tablet to be pre-loaded with scanned copies of text books

*   Icons on home page to show the " Subject Name " of text book

*   Tablets to be distributed at the beginning of each academic session

*   Students to be allowed to carry the tablets home and use for homework

*   Students to return the tablets at the end of each session

*   Tablets can be given to the next batch of students for reuse

*   Students should have option to " pay and buy " the tablet , in which case

     School Administration will load it with required text books, free of charge

     Alternatively, students can buy their choice of tablet from market

*   It will be the responsibility of school management to ensure that the

     all tablets are always pre-loaded with  the " Prescribed " text books

When schools are charging annual school-fees of Rs 30,000 / - to Rs 100,000 /- , surely they can afford to invest in tablets costing Rs 10,000/- !

Of course , poor children , attending Municipal Schools will benefit most since they cannot afford to buy own tablets or pay high fees

And since there is no internet access from these tablets , school managements do not have to worry about students accessing " In-appropriate Content " and waste their time on Facebook / Youtube etc !

I am sure, some schools here and many schools abroad , have already implemented this idea , which must have occurred to millions, earlier !

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www.hemenparekh.in / blogs

04  April  2016

Ambiguity is Bad !

Where  ?

*  Health Ministry wants warning images on cigarette packs to cover 85% of the surface , against earlier rule of 40%

*  A Parliamentary Committee had recommended 50 %

Reaction :

*  From friday ( 01 April 2016 ) , all cigarette factories have shut down in protest ,

According to Tobacco Institute of India , this will cause,

   #  Daily revenue loss of Rs 350 Crores

   #  Threatening livelihood of 45.7 million people dependent on the Industry

   #  Increase in trade in illegal cigarettes ( which already causes an annual

       revenue loss of Rs 9,000 cr to the exchequer )

What should Government do ?

 Negotiate with the Industry and reach Agreement , using my suggestion as under :

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Source : my blog dt 18 Aug 2013

 Going Up in Smoke ?

 

Yesterday , Times of India reported :

India's tobacco industry supports 38 million people ( 380 lakhs )

Every year , some 6 million ( 60 lakh ) people die in India thru use of tobacco ( mostly cigarettes )

Of these , some 6 lakh die by inhaling smoke of other cigarette smokers

So what can we do to save these 60 lakh ?

Immediately close down entire tobacco industry ?

And jeopardize the lives of 380 lakh  ?

Obviously , we cannot adopt a mutually exclusive solution !

We must find a solution that , not only saves those 60 lakh but also continue to provide livelihood to 380 lakhs

That cannot be done in one - or even five - years , but it is entirely possible to solve this problem over , 20 years , as follows :

*   Thru appropriate legislation , phase out tobacco industry by 2033

*   Immediately stop expansion of existing units

*   Do not allow new units to come up

*   Place a recruitment freeze in tobacco industry - no fresh hiring at any level

*   No replacement for retiring employees , after 2018

*   Provide incentives to industry to redeploy capital / manpower in alternate industries - especially those industries with large scope for creation of new jobs

*   Give generous tax-breaks to industry to remain profitable , even as they wind-up operations

*   Provide incentives to put up new-industry projects in less industrialized regions

*   Provide incentives for re-training existing workers in new skills in demand by others

*   Subsidize Voluntary Retirement Schemes of industry

This is just a partial list . I am sure , if there is political will , experts will come up with many more viable suggestions

Hint :

If Shri Piyush Goyal can plan on banning all petrol / diesel driven vehicles on roads from 2030 , then banning cigarettes from 2036 , ought to be a " Child's Play " !

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hemenparekh.in / blogs

03  April  2016

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Make    Yourself    Heard

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It is time for YOU to speak up - and demand that YOU are heard

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One day Polling is Possible

DNA ( 31 March 2016 ) reports :

"  Prime Minister Narendra Modi has mooted a proposal to hold simultaneous elections to Panchayats , State Assemblies and Parliament across the country

The Parliamentary Standing Committee on Personnel , Public Grievances , Law and Justice had in December , recommended holding simultaneous Assembly and Lok Sabha elections to reduce expenditure and frequent disruption of normal life  "

Not only it is possible to do this ( in ONE DAY ) but it has the potential to bring about Electoral Reforms of far reaching beneficial impact

Following is the suggestion that I sent to Shri Narendra Modiji on 06 Nov 2014 :

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VotesApp

( from my blog dated  18 Dec 2012 )

*  An Android app which can be downloaded from Google Play / Android Zoom / GetJar and the official web site of Election Commission of India

*  It will be pre-loaded on 220 million Aakash tablets  which Govt of India plans to distribute to students

*  It will also be pre-loaded on those Smart phones ( to be called, “ Dharati “ ? ), which Govt of India plans to distribute free to 400 million “ poor “ Indians , before 2014 National elections

*  All tablet / smart phone manufacturers will be encouraged to pre-load VotesApp

*  Using this app , a voter can register at Election Commission web site, where he will enter the same data which he has submitted for his Aadhar card, including Aadhar card number (Unique Identification No)

*  All of these details will be verified by Aadhar database

*  Obviously , those who have not obtained their Aadhar card , will not be able to use VotesApp . They will need to visit nearest polling booth

*  Upon correct verification , Aadhar Database will permanently link the person’s Aadhar number with the mobile number from which  registration is done, and issue a Password

*  An under aged person will not be allowed to register

*  A person will be able to vote only from that mobile number

*  After login on first screen, user will be asked to select one option from,

    #   Panchayat  Election

    #   Municipal  Election

    #   State Assembly  Election

    #   Lok-Sabha  Election

*  Upon selection, user will be presented with the list of candidates contesting , from which , he can select only one by ticking a check-box. 

  

    There will be also a choice , labeled “ None “ ( NOTA )

*  A long press on a candidate’s name will display details of his declared assets as also his criminal record

*  After ticking / selecting a candidate, voter will click on  “ VOTE “ button, whereupon his vote gets registered and VotesApp gets de-activated

*  Once a voter registers on Election Commission web site , he cannot go to a polling booth and vote physically

*  In less than one year , Govt of India will recover the cost of 220 million Aakash tablets and 400 million” Dharati “ smart phones , through this customized / personalized / shrinking of EVMs ( Electronic Voting Machines ) to a hand-held device.

    And imagine the millions of man-hours saved !

*  And the beauty is , no one can capture this booth , or conduct exit polls !

   What will “ experts “ discuss on TV channels ?

*  What next ? Election Commission “licensing “ this App to other countries ?

HOW  WILL  IT  HELP  ?

*  No need for 930,000 polling booths / EVMs / Ink / Papers etc

    Every voter's own mobile becomes a miniature EVM  !

    Any registered Voter can vote from anywhere in the World  !

*  Nor any need to deploy 1,100,000 people to conduct the polls

*  No need for millions of Police / Military personnel

*  No need for months of advance preparations, across entire country

*  Voting can be completed in just ONE day - instead of over 6 weeks -
    and results can be declared next day  !

*  Voting could be 95 % or more  !

*  No worry for booth-capture

 

*  No  bogus voting ( Bio-metric ID from built-in camera )

*  No duplicate voting ( Self-destruct after single usage )

*  No worry for any terrorist attacks

*  Enormous saving of time for Voters

*  No need to declare a public holiday - costing thousands of crores 
     worth of production

*  Central Government will save, at least , Rs 2,000 Crores .

*     For the Central Government , a potential  to earn Rs 20,000 crores , by

       enabling 15 million Indian businesses to advertise to 814 million voters

       thru this mobile VotesApp , sharply targeting by Gender / Age / Marital

       Status / City / Street / Education / Income Tax paid / Employed or

       Jobless ..etc

       

*   No need for Central Government to stop taking even routine decisions 

    ( due to Model Code of Conduct )

If a tiny country like Estonia ( population 1.6 million ) can elect its Members of Parliament thru a VotesApp type mobile App , why can't we  ?

Already 900+ million Indians have mobiles - all of which , will soon become Smart Phones

As far as designing / developing of  VotesApp  is concerned , it is NOT a Rocket Science

Any IT / E-Comm Start Up , should be able to develop  VotesApp  in 3 months

Can you think of a better way for " E-delivery of Service " ?

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www.hemenparekh.in / blogs

01  April  2016

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Make    Yourself    Heard

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It is time for YOU to speak up - and demand that YOU are heard

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