Letters to the editor
Tackling black money
The issue of black money elicited hyper-reactions from the BJP in the run-up to the general election last year, and not without reason. For a layperson, black money is usually associated with the rich. Often, political parties raise this issue to demonstrate their pro-poor slant. Given these facts, it is no surprise that the BJP government has proposed a slew of legislative actions to tackle the twin issues of assets held illegally abroad and unaccounted wealth within the country. The Budget proposals no doubt reflect the political underpinnings of the BJP’s thought process on an issue like black money. These will serve to please its core constituency, which voted for it overwhelmingly. Nevertheless, these represent merely an attempt to discover a cure for the disease. The system and the practice as they exist today create a perfect breeding ground for tax evasion. And the tax structure adds to the complication. If the benefit accruing from avoidance is great and the risks of detection are minimal, the tendency to evade tax will persist. Jaitley’s Budget-speech proposal will instil fear in the minds of tax-evaders. Also, these could arm taxmen with more powers. Vodafone and similar cases are examples of how the taxman has often adopted a blinkered approach. Should the focus not be on erasing the benefits arising out of tax avoidance? Surely, prevention is the right solution. This calls for an environment that fosters tax compliance, and a regime that ushers in a friendly playing field. If any proof is required, it is available in the ongoing coal and spectrum auctions. One needs a wiser head, more than a heavy hand, to tackle the black money menace.
Bhagwan Thadani, Pune
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