The NDA government has expressed its commitment to rationalising tax structures, taxing at reasonable rates, and placing more money in the hands of small earners.
Making this announcement on Sunday through a Facebook post titled ‘The NDA government’s campaign against black money’, Union finance minister Arun Jaitley stated that no society can indefinitely sustain a system where income earners consider tax evasion as a way of life.
“It has been a conscious strategy of the NDA government to put more money in the pockets of middle and low-income groups by raising exemption limits and incentivising savings through fiscal policy,” he said.
The minister alleged that India’s high taxation regime of the past had led to an increase in instances of tax evasion. “When states tax people reasonably, they can persuade them to honestly declare their incomes,” he noted.
Jaitley said his government stands by the commitments it had made in the 2015 budget, including bringing down the corporate tax rate to 25% in four years and phasing out most exemptions – with the exception of the ones that incentivise savings.
The post also stated that the government was at an advanced stage of considering the mandatory furnishing of PAN card details for cash transactions beyond a certain limit.
Besides this, the finance minister called for an attitudinal change in the nature of business transactions, wherein plastic currency would be preferred over cash.
“The bulk of black money is still within India. We, therefore, need a change in the national attitude, where plastic currency becomes the norm and cash an exception,” he said.
“The opening of a large number of payment gateways, internet banking, payment banks and the emerging reality of e-commerce will prompt the use of banking transactions and plastic money to rise significantly.”
Drawing a distinction between earlier tax amnesty schemes and the just-concluded compliance window for declaring foreign assets, Jaitley said: “The comparison of these amounts with amnesty schemes relating to domestic black money is ill-conceived. The campaign against domestic black money has to be separately dealt with, for which the government is independently taking steps.”
“The assessed income of Rs 6,500 crore in HSBC and Rs 3,770 crore declared income during the compliance window should not be treated as income under any immunity scheme,” he added.