1. Black Money creates an environment of unabashed thievery and unleashes three grave problems:-
a) A consistent demand from unaccounted cash economy keeps asset prices high, as they don't respond to monetary policy, interest rates or other supply-side factors,
b) Vested interests begin to control supplies to ensure that prices don't correct easily, and
c) Black money persistently seeks loopholes to exploit, and be turned to white, to be freely invested at lower risk, lesser taxes and no penalties.
2. It is commonplace among individuals and companies to create a web of entities, use complex transfer pricing and questionable accounting practices, and manage to both avoid and evade taxes.
3. As it is a core financial principle to account for one's assets and operations, and pay taxes, Indian laws have enough teeth to go after tax evaders, to inject capital into genuine economic activities and investments through a culture of compliance, which is essential in a capital-starved economy like ours.
4. Yes, rationalization and reduction of personal and business tax slabs, to broaden the taxpayer base, is always a better way forward, and Winston Churchill once remarked, "We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle."
5. Having said that, while it can be continuously urged by aggrieved citizens to review existing taxation laws through appropriate forums, it shouldn't become a license for resorting to illegal and unethical taxation and business practices in the interim, for making their income and business propositions viable.
6. Such ways are eventually a "lose-lose situation" for all - including family, investors, shareholders, mutual funds, etc. - with the only clear winner being Black Money economy, hence they need to be firmly curbed and dealt with.
a) A consistent demand from unaccounted cash economy keeps asset prices high, as they don't respond to monetary policy, interest rates or other supply-side factors,
b) Vested interests begin to control supplies to ensure that prices don't correct easily, and
c) Black money persistently seeks loopholes to exploit, and be turned to white, to be freely invested at lower risk, lesser taxes and no penalties.
2. It is commonplace among individuals and companies to create a web of entities, use complex transfer pricing and questionable accounting practices, and manage to both avoid and evade taxes.
3. As it is a core financial principle to account for one's assets and operations, and pay taxes, Indian laws have enough teeth to go after tax evaders, to inject capital into genuine economic activities and investments through a culture of compliance, which is essential in a capital-starved economy like ours.
4. Yes, rationalization and reduction of personal and business tax slabs, to broaden the taxpayer base, is always a better way forward, and Winston Churchill once remarked, "We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle."
5. Having said that, while it can be continuously urged by aggrieved citizens to review existing taxation laws through appropriate forums, it shouldn't become a license for resorting to illegal and unethical taxation and business practices in the interim, for making their income and business propositions viable.
6. Such ways are eventually a "lose-lose situation" for all - including family, investors, shareholders, mutual funds, etc. - with the only clear winner being Black Money economy, hence they need to be firmly curbed and dealt with.