Monday, January 14, 2013

Tax Evasion , Common Men And Rich Business Houses

Government cannot afford paying subsidy for LPG Diesel, fuel etc although they are of use for mostly common men. Government could not delay abolition of or rationalizing of subsidized gas cylinders making lame excuse of fiscal deficit or current account deficit going beyond control.

But the same government is ready to sacrifice even ten lac of crore of rupees in the name of tax rebates , discounts, subsidy which are given to multi millionaire corporate houses in the name of stimulus package to cope with global (not Indian ) recession.

Government is ready to accept and bear with tax avoidance by foreign or domestic investors so that stock market continues its upswing. For last ten years and more government is allowing tax avoidance and tax evasion perpetuated by High net worth investors with the help of P note and in the name of foreign investment. Government does not have courage to implement GAAR and have been postponing its implementation since long.

Government does not have will to control rise in black money and do not have will to bring back black money parked in foreign banks and do not have will to stop large scale tax evasion undertaken by big companies in nexus with Income tax officials because it is these companies which manage fund for election for these political parties.

It will not be incorrect to say that this government is by the rich, for the rich and of the rich. The leaders and key players of the government think what is good for foreigner, FII and big corporate houses.

They pretend to think for common men but their all actions are directed against the welfare of common men. They never think and act to increase income of common men but always care that profit of business giants is not diluted.

If a taxi driver increases taxi fare due to rise in fuel price, he is taken to task and his fare is regulated by the government agencies. But on the contrary if a medicine manufacturer earn 1000 percent profit on sale of medicine in comparison to generic medicine, government do not have time and manpower to regulate medicine prices.

Government does not have courage to control schools and higher education colleges to keep their tuition fee structure reasonable and affordable. Common men and even upper middle class families cannot afford meeting education expenses incurred on educating their children.

Government does not have courage and will to recover ill earned money from corrupt politicians and corrupt officials working in key departments. If Government can stop even fifty percent of money lost in pilferage of money by politicians and government officials , I think there will never be any fiscal deficit or any shortage of fund for social welfare scheme and neither government will need to increase LPG prices.

2013 projetcs new highs for markets as GAAR gets deferred to 2016 ( news Economic Times )

NEW DELHI: The government has deferred the implementation of controversial tax-avoidance rules until 2016, to the relief of markets and industry, which had been crying hoarse about their corrosive effect on investor sentiment towards India at a time business confidence is already low.

Announcing the decision to defer the so-called General Anti-Avoidance Rules, or GAAR, by two years a week before he leaves on a tour of Asia and Europe to woo foreign investors, Finance Minister P Chidambaram said the government had "accepted the major recommendations with some modifications" of a high-level committee headed by noted tax expert Parthasarathi Shome.

These rules had become a lightning rod for criticism after being unveiled in last March's budget, and the uproar they triggered had forced the government to delay their implementation by a year.

Industry cheered Monday's decision to delay GAAR's implementation by two more years, and in the stock markets, the benchmark BSE Sensex jumped by 243 points to close at a two-year high.

"The decision to defer GAAR would stimulate business confidence of investors, which had taken a beating with the introduction of tax proposal. In the next two years, it is hoped that the global and domestic economic conditions would improve and the imposition of GAAR would not have too much of a negative impact on investments, both domestic and foreign," said industrialist Adi Godrej, who is also the president of industry group CII.

Planning Commission Deputy Chairman Montek Singh Ahluwalia also called the GAAR deferral a step in the right direction.

The GAAR rules sought to clamp down on tax avoidance by denying tax benefits to any arrangement entered into with the sole objective of avoiding taxes. Although these were targeted mainly at investments routed into India through tax havens and countries such as Mauritius, investors feared these rules would leave too much discretionary powers in the hands of tax officials and lead to harassment.

Prime Minister Manmohan Singh, who temporarily took charge of the finance ministry following the resignation of Pranab Mukherjee to contest presidential elections, set up the panel of experts under Shome to review GAAR. This committee, in its report to the finance ministry, had suggested a three-year deferral of the rules to give more time for effective implementation, but this was resisted by the Central Board of Direct Taxes, forcing the government to find a middle ground.

The GAAR rules, when they come into force, will not apply to foreign institutional investors who do not take any benefit under a tax pact, leaving open the possibility that it could apply to investors using Mauritius as their base.

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