A few years after the publication of the Panama Papers, a new article broke into the news, revealing complex webs of offshore transactions by wealthy individuals around the world. The Pandora Papers from the International Consortium of Investigative Journalists, of which the Indian Express is a part, feature people from diverse backgrounds, from sports and entertainment to public affairs and business, and even some who are already under the scanner. of State. for hidden assets. The result of a survey that explored up to 12 million documents from 14 companies in offshore tax havens with the ownership details of 29,000 offshore companies and trusts, the latest list also contains royalties, except a few heads of state and more. over 130 billionaires. What they have in common is that they all have offshore assets held through trusts or corporations. Over 300 Indians have reportedly been named, and while it is not clear whether any Indian law has been violated, or anyone’s privacy in the process, exposing foreign finances in this manner is highly relevant in India. , given our problems of tax evasion and underhand capital. Despite an open capital account, we put a cap on outward money transfers by individuals, but various dodges have long been used to divert wealth abroad for hidden investments or secret vaults. Ill-gotten gains are often hidden like this.

Hiding wealth from state authorities goes back a long way, with financial planners often ahead of detectives on their trail, but such massive disclosures are a godsend. They offer leads that should be researched quickly and subjected to legal review. Until then, except in flagrant cases of illegality, all asset owners must be cleared, unless proven otherwise. Our remittance scheme allows residents to move up to $ 250,000 overseas each fiscal year, while non-residents have a multiple limit, and a globalized world has resulted in foreign business transactions and income. . People who own property beyond our borders may or may not break the law. Yet, there are many offshore vehicles in play that raise suspicion with online holdings that suggest an attempt to obfuscate beneficial ownership. When such motives are betrayed, in particular, no time should be wasted investigating the case.

From another perspective, the larger problem that Pandora has opened up is that of the potential flight of capital. High levels of purchases in jurisdictions usually correlate with large sums of money flying away. Our barriers are porous, thanks to globalization, while a heavier tax burden recently imposed on wealthy Indians and growing inequalities have raised concerns about the tax system that has become too severe. Calls for sharper redistributive action have increased, our need for public spending has increased, and wealthy Indians who expect a return of some sort of wealth or inheritance tax would be tempted by offshore options. . India cannot return to tighter capital controls without serious repercussions. These restrictions are usually blunt instruments that cause a lot of collateral damage in an open world of trade and other cross-border transactions. They would also amount to a rollback of our economic reforms. What we can and must do, however, is ensure that our tax policy and other parameters minimize the incentives for people to take large sums of money out of the country. Part of it is that India needs to retain its charm as a fast emerging, high performing market. The assurance that unfairly heavy demands will not be imposed on the rich is another.

To subscribe to Mint newsletters

* Enter a valid email address

* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our app now !!

Source link