Indians disclose $10 b in hidden wealth in tax evasion amnesty

Monday, 3 October 2016 00:01 - - {{hitsCtrl.values.hits}}

Reuters: A government amnesty targeting tax evasion in India has prompted tens of thousands of suspected tax dodgers to disclose nearly $10 billion in undeclared income, the finance minister said on Saturday.

The government of Prime Minister Narendra Modi sent out about 700,000 notices earlier this year to suspected evaders to coax them to declare hidden income and assets, known as “black money” in India, promising they would not be pursued by authorities if they came clean and paid a penalty. Finance Minister Arun Jaitley told reporters the four-month scheme that closed on Friday had led to 64,275 declarations, resulting in a provisional INR 652.5 billion ($9.8 billion) in undisclosed wealth.

Jaitley added the final figure would likely be higher.

Factoring in taxes owed and penalties of 45%, the government could raise more than INR 293.6 billion ($4.41 billion) from the declared income, according to Reuters calculations.

There was no public target for the initiative, but government officials had an internal goal to raise about $7.5 billion in back taxes.

During the 2014 elections, Modi pledged to bring back billions of dollars in “black money” if elected. Modi, in a tweet, called the outcome of the scheme “successful” and said it was “a great contribution towards transparency and growth of the economy.”

In a country of 1.3 billion, fewer than 18,000 people declared annual income of INR 10 million or more in 2012/13, the latest figures show.