Posts tagged ‘Goods and Services Tax (Australia)’

03/10/2016

India tax amnesty draws $9.8bn in asset declarations — FT.com

Modi government claims progress in fulfilling election vow to crack down on ‘black money’

A four-month amnesty for tax evaders in India has resulted in the declaration of hidden assets worth nearly $10bn, the government has said, as it seeks to fulfil an election pledge to crack down on illicit “black money”.

The Income Declaration Scheme, which ran from June through September, allowed citizens to report assets previously undeclared to the tax authorities, without risk of prosecution. A charge of 45 per cent was to be levied on the assets declared under the scheme — one of the most conspicuous initiatives in Prime Minister Narendra Modi’s drive to tackle widespread corruption that is seen as a significant drag on the economy.

Arun Jaitley, finance minister, told reporters at the weekend that assets worth Rs652.5bn ($9.8bn) had been declared under the scheme, implying a boost to government revenue of Rs294bn. The amnesty attracted 64,275 declarations, with the average amount declared standing at Rs10.2m. Mr Jaitley cited this to rebut prior fears that the initiative might not elicit a response from wealthy Indians.

New Delhi had not publicly stated a revenue target, but some media reports had said officials were aiming to uncover about Rs1tn in previously undeclared assets.

The initiative followed a similar one launched in 1997 that yielded revenue of Rs97.6bn, but Mr Jaitley said that the latest drive was firmer in its treatment of evaders, arguing that the previous effort had allowed them to make payments based on unduly low valuations of their assets.$9.8bnA

mount of assets declared under India’s four-month tax amnesty

Only about 4 per cent of Indian adults pay income tax, according to the government’s latest economic survey. While the annual income of most Indians is below the Rs250,000 threshold beyond which income tax is due, the slender income tax base also reflects the extent of economic activity that occurs through informal transactions beyond the oversight of tax officials. Such activity amounts to about 20 per cent of gross domestic product, according to a recent report by analysts at Ambit Institutional Equities. That report argued that heightened official scrutiny of domestic transactions had encouraged tax evaders to keep money in cash, hitting demand for formal banking services as well as for property and gold — asset classes commonly used to launder money. Liases Foras, a property research company, estimated in 2014 that 30 to 40 per cent of Indian real estate transactions involved an illicit cash payment.

Firm progress in reducing tax evasion would boost the credibility of Mr Modi’s government, which made this a key part of its 2014 election manifesto. $343bnEstimated amount of assets Indians sent abroad illicitly between 2002 and 2011Central to the drive has been the pursuit of funds concealed in offshore accounts, of which Mr Modi pledged before his election “to bring back every rupee … and use it for the welfare of the poor”.

The US-based group Global Financial Integrity has estimated that Indians sent $343bn of assets abroad illicitly between 2002 and 2011.Last year India’s parliament passed a law imposing criminal penalties for the illicit concealment of overseas assets. This year the government scrapped a treaty with Mauritius under which investments from the island state were exempted from capital gains tax: an arrangement that had been criticised for allowing wealthy Indians to “round-trip” illicit funds back into the country.

Source: India tax amnesty draws $9.8bn in asset declarations — FT.com

Advertisements
09/06/2015

Modi to launch India’s biggest labour overhaul in decades | Reuters

Prime Minister Narendra Modi is preparing to launch India’s biggest overhaul of labour laws since independence in a bid to create millions of manufacturing jobs, at the risk of stirring up a political backlash that could block other critical reforms.

Prime Minister Narendra Modi waves towards his supporters during a rally in Mathura, May 25, 2015.  REUTERS/Adnan Abidi

Three officials at the central labour ministry told Reuters that the ministry was drafting a bill for the upcoming parliamentary session that proposes to loosen strict hire-and-fire rules and make it tougher for workers to form unions.

The changes, if approved by parliament, will be the biggest economic reform since India opened its economy in 1991, but it is likely to meet stiff opposition in parliament and from labour activists.

The prime minister enjoys a majority in the Lok Sabha, but not the Rajya Sabha, hobbling his ability to pass politically contentious measures.

That handicap has stymied his efforts to make it easier for businesses to buy farmland and convert Asia’s third-largest economy into a common market.

Rajiv Biswas, Asia-Pacific chief economist at IHS Global Insight, said Modi had little option but to push ahead with the measures.

“Without these reforms, the economy would stagnate, and frustrated investors would look elsewhere,” he said.

“You cannot make political opposition an excuse for not taking tough decisions.”

Since taking office in May last year, Modi has taken a series of incremental steps to make labour laws less onerous for businesses, but fear of a union-led political backlash made him leave the responsibility for unshackling the labour market with Indian states.

He let his party’s governments in Rajasthan and Madhya Pradesh take the lead in this area.

Encouraged by a successful and peaceful implementation of the measures in those states, the federal labour ministry now intends to replicate them at the national level, one of the ministry officials said.

Manish Sabharwal, one of the brains behind Rajasthan’s labour reforms and co-founder of recruitment firm Teamlease, said the federal administration would have been better off without attempting these changes.

“Let states carry out these changes and save your political energy for other policy reforms,” he said.

via Modi to launch India’s biggest labour overhaul in decades | Reuters.

14/05/2015

Delayed reforms, market woes tarnish end to Modi’s first year | Reuters

A surprise delay to India’s new goods and services tax (GST) marks one of the most painful setbacks suffered by Prime Minister Narendra Modi‘s government as it nears the end of a first year in power, with markets falling and farmers braced for a poor monsoon.

Prime Minister Narendra Modi attends an event in New Delhi February 17, 2015. REUTERS/Stringer/Files

Investors had hoped that the ruling Bharatiya Janata Party‘s majority in the Lok Sabha, the lower house of parliament, would ensure Modi could push through reforms far more smoothly, but that assumption has taken a battering.

Late on Tuesday, the government submitted to strong opposition in the Rajya Sabha, the upper house, by agreeing to delay the landmark tax legislation until at least July.

The introduction of the GST would constitute India’s biggest tax reform since independence.

The delay to the bill is a blow to a government that is already dealing with rural discontent over proposed land reforms, which have also still to be sent to the upper house for approval.

The GST would replace a patchwork of levies by the central and state governments, reducing corruption, attracting investment and — according to the finance minister — add 2 percentage points to India’s growth.

Senior officials said on Wednesday they feared the delay could become yet another “sell” signal for foreign funds, already angered by the government seeking to tax them for several years of previously untaxed gains.

“A delay in parliament approval of the GST bill will send a wrong signal to investors, who are already grappling with tax notices,” said one senior government official dealing with economic policy decisions.

India was Asia’s second best performing market last year and the government has scored some successes. It has, for example, improved its finances, held successful telecoms and coal block auctions, and allowed more foreign investment into the insurance and defence sectors.

But the shine has worn off. Foreign investors sold nearly $2.2 billion in shares during the last 16 trading sessions.

via Delayed reforms, market woes tarnish end to Modi’s first year | Reuters.

Law of Unintended Consequences

continuously updated blog about China & India

ChiaHou's Book Reviews

continuously updated blog about China & India

What's wrong with the world; and its economy

continuously updated blog about China & India