Amid reports of some Indians having unaccounted wealth in tax havens, Finance Minister Arun Jaitley today said those who did not take advantage of the compliance window last year to declare illegal assets abroad will find “such adventurism extremely costly”.
The minister said global initiatives to deal with the menace of unaccounted wealth abroad will be in place by 2017, and then it would become extremely difficult for individuals to hide assets.
“With G20 initiatives, FATCA and bilateral transactions in place with effect from 2017, the world is going to be a far more transparent institution and therefore, this kind of an adventurism will prove to be extremely costly for those who have indulged in it,” Jaitley said while addressing the annual session of industry body CII.
His statement comes on a day when The Indian Express newspaper, based on leaked documents of Panama law firm Mossack Fonseca, reported that over 500 Indians including some well known names figure in the list of persons having association with firms in tax havens.
Jaitley said those who did not take advantage of the black money compliance window last year to declare undisclosed overseas assets will realise their mistake.
“I had come in for adverse comment including some of my friends here when in 2015 Budget we had announced a strong penal law against illegal assets abroad. At that stage I had said that those who committed mistakes in the past are getting last opportunity with a compliance window in place.
“The compliance window operated (and), many availed but probably some didn’t. Today when I see contrarian reports appearing (in media), which are not only impacting India… which are impacting the rest of the world. I think it is a stern reminder to all of us,” he said.
Last year, during the 90-day compliance window ended September 30, the government had received disclosures of undeclared overseas wealth totalling Rs 4,147 crore.
Those wanting to come clean were required to pay 30 per cent tax and 30 per cent penalty.
Beside, the government in this Budget came out with a compliance window to encourage domestic black money holders to declare assets in the four-month compliance window, which will open in June. They will have to pay a total of 45 per cent tax and penalty.
Jaitley further said the essence of the industry will have to be entrepreneurship and also credibility.
“If India aspires to be the fastest growing global leader, as far as the economy is concerned, we in government have a primary responsibility in terms of policy and guiding public opinion,” he said adding the industry also has to work towards achieving the goal.
Citing various initiatives taken by the government to boost economic activity, the minister said “… with all the new avenues of entrepreneurship available at globally competitive rates, corruption level significantly going down if not disappearing, a far more ease of doing business, more and more avenues are being made available to you.”
With regard to mounting NPAs, he said some recent events haven’t added to the industry’s credibility as far as resolution of bad loans are concerned.
“As far as industry is concerned, we always welcome entrepreneurship. I also appreciate the kind of challenges which you are facing today but I think Indian industry is also fighting a major battle for its own credibility.
“Some recent events haven’t added to their credibility, and therefore, in this entire debate which is going on non-performing assets… but the approach of the leaders of the industry will certainly have to be always positive and ethical because it is that approach which is going to add to their credibility,” he said.