FM Arun Jaitley promised a 'reasonable compliance window' under the new black money law for persons with overseas funds to come clean...
Finance Minister Arun Jaitley today promised a “reasonable compliance window” under the new black money law for persons with overseas funds to come clean, even as he asserted that targeting undeclared assets cannot be termed as ‘tax terrorism’.
Addressing industry representatives at CII annual general meeting, he also sought suggestions for improving the structure of the compliance window proposed Undisclosed Foreign Income and Assets (Imposition of Tax) Bill 2015.’
“…a very reasonable compliance window would come for those who indulged in misadventure in the past,” the Finance Minister said.
“If some reasonableness is required, the government or Parliament or the legislature will be open to reasonable suggestions which will be welcomed in these matters.”
The government had introduced the stringent Bill in the Lok Sabha to deal with the menace of black money stashed abroad. Besides other things, the law provides for imprisonment of up to ten years for hiding foreign assets.
It will also provide a short-term compliance window for people having undisclosed income abroad to come clean.
Jaitley further said that in view of the efforts being made globally by the US and organisations like G-20 to deal with black money, it would be difficult for anyone to hide foreign assets.
“Over the next 2-3 years, G-20 initiative for automatic exchange of information is going to take shape. India is going to become a signatory to the US law FATCA, and thereafter not only the US, other countries inter-se would also be discharging their obligation to each other.
“…the disconnect from the past will surely come… rather than wait for that opportunity where people run into trouble and then say targeting undeclared, undisclosed income or assets abroad is terrorism, it would be in everybody’s interest that the rule of law is complied with,” Jaitley said.
Jaitley said that in the backdrop of global efforts being made to unearth undisclosed foreign assets, the tax regime was going to be “extremely challenging.”
Referring to his budget proposal to reduce the corporate tax from 30 per cent to 25 per cent, the Finance Minister said there should be no reason for anyone to indulge in “misadventure” as the risks were going to be huge.
Elaborating on the proposed compliance window, Jaitley said that as Parliament was going to bring a new tax law “it is fair enough to say there will be a compliance window. All suggestions with regard to that compliance window and manner and extent of compliance…are welcome.”
The Minister also promised to look at the provisions of the Prevention of Corruption Act in light of the recommendations of the Law Commission.
“There are many other challenges… These challenges relate to the decision-making process being fair but also fearless,” Jaitley said adding that although the Prevention of Corruption Act was drafted in pre-liberalisation era in 1988, it is deterring civil servants from taking decisions.
“The law commission has sent its recommendations that in the changed environment it requires a relook. Therefore a large number of criminal cases, both against industry and decision makers, which have in the last few years disrupted the economic and business environment of this country require to be seriously addressed by looking at the language of the Act,” he added.
Jaitley asked the industry to set up working groups to suggest changes in the law to streamline the decision-making process and ensure that errors and corruption cases are dealt separately.
“I would urge everybody, including the industry, to set up some working groups and assist in the process of this debate as to what kind of changes are required where errors in decision making can be contra-distinctly dealt with from corruption in decision making. Both require to be dealt with entirely separately,” the Minister added.