NEW DELHI: The government on Monday set up a new multi-agency group comprising CBDT, RBI, FT&TR (Foreign Tax and Tax Research) and FIU (Financial Intelligence Unit), to look into the alleged offshore holdings by Indians being named in the leaked 'Panama Papers'.
Prime Minister Narendra Modi discussed the issue with Jaitley and on his advice the group has been set up.
“The multi-agency group will continuously monitor these (accounts) and whichever accounts are found to be unlawful, strict action as per existing laws will be taken,” Finance Minister Arun Jaitley said.
Warning of stringent action against those who fail to declare illegal assets abroad, he said “such adventurism (would be) extremely costly” for those who did not take advantage of the compliance window offered last year to declare such assets.
Addressing the annual session of industry body Confederation of Indian Industry (CII) here, Jaitley said, by next year, global initiatives to deal with the menace of unaccounted wealth abroad will be operational. This will make it extremely difficult for individuals to hide assets.
“With G20 initiatives, Foreign Account Tax Compliance Act (FATCA) and bilateral transactions in place with effect from 2017, the world is going to be a far more transparent institution and therefore, this kind of an adventurism will prove to be extremely costly for those who have indulged in it,” Jaitley said.
The warning from the Finance Minister assumes significance following the revelations that more than 500 Indians allegedly have association with firms in tax havens. The documents containing the names of Indians made by the Panama-based law firm Mossack Fonseca was leaked to German newspaper Suddeutsche Zeitung. This was then shared with the International Consortium of Investigative Journalists in 107 media organisations in 78 countries.
Mossack Fonseca is estimated to hold 11 million documents, which could include names of more Indians and firms held by them. Name of more than 500 Indians have been revealed allegedly having association with firms in tax havens.
Last year, the Indian government had offered a 90-day compliance window, till September 30, to declare their undeclared assets abroad, by paying 30 per cent tax and 30 per cent penalty. The government received Rs 4,147 crore from such disclosures.
“The compliance window operated (and), many availed but probably some didn’t. Today when I see contrarian reports appearing (in media), which are not only impacting India...which are impacting the rest of the world. I think it is a stern reminder to all of us,” said Jaitley.
FM Hopes Reserve Bank will further cut policy rates
A day before the RBI announces the annual monetary policy, Jaitley expressed the hope that it will further cut policy rates to maintain the growth momentum. “The government has stuck to fiscal deficit commitments and inflation has been under control. Therefore, I do hope that this movement will continue in order to make our economy more competitive with more competitive interest rates.”
‘Adopt ethical approach AGAINST loan defaulters’
Amid rising cases of wilful default on loans, including the one by Vijay Mallya, Jaitley said industry is fighting a battle of credibility and it should adopt positive and ethical approach towards NPAs. “Indian industry is also fighting a major battle for its own credibility. Some recent events haven’t added to their credibility,” he said, without naming Mallya who has defaulted on Rs 9,000 crore loan.