India collects $9.8bn in tax evasion amnesty scheme
The Indian government has collected more than Rs650bn (US$9.8bn or UK£8bn) in the form of cash and assets through a tax evasion amnesty scheme.
For a four-month period, ending in September, the government offered tax cheats immunity from prosecution if they came forward, paid their evaded tax bill and stumped up a hefty fine. More than 64,000 individuals came forward to declare their undisclosed assets under the Income Declaration Scheme (IDS), which was run by the Indian finance ministry.
The IDS was announced in this year’s Budget as a one-time opportunity for evaders to come clean by paying the total tax amount and a 45% penalty. Now guaranteed protection against legal action, the taxpayers have the option of settling the payment in three instalments before September 2017.
Prime Minister Narendra Modi’s pledge to collect the taxes due on undeclared income, known locally as ‘black money’, formed one of a set of key promises that helped him to victory in his 2014 general election campaign.
The Rs650bn “is a very good figure. The last-minute declarations are still being verified. So this number is likely to go up in the coming days. More people in the higher income bracket want to become tax compliant,” said finance minister Arun Jaitley at a press conference. The government did not set any particular target when it announced the plan.
Jaitley has also promised there will no witch-hunt against the declarants, and reassured them that confidentiality will also be maintained. The cash raised from the programme will be funnelled to the government’s Consolidated Fund of India and used for public welfare measures, said the ministry.
During the four-month-long campaign, the government contacted close to 700,000 suspected tax offenders and exhorted them to disclose their assets. Besides drafting in movie superstars like Anil Kapoor and Kamal Hassan to help promote the scheme, the finance ministry’s revenue department helped organise over 5,500 public meetings – many in the form of ‘Talkathons’, ‘Walkathons’ and street plays – to raise awareness and build public support.
