India's Offshore Tax Amnesty Flops
by Mary Swire, Lowtax.net, Hong Kong
02 October, 2015
A high-profile tax amnesty campaign by the Indian Government has substantially undershot expectations, with fewer than 1,000 taxpayers using the scheme to declare offshore assets in return for reduced penalties.
The Finance Ministry announced on October 1 that it received declarations worth INR37.7bn (USD574m) from just 689 applicants during the three-month amnesty period, which concluded at midnight September 30. It is though that the Government will collect about INR23.3bn in back taxes from this amnesty.
Those bringing undeclared funds back to India under the amnesty avoided criminal proceedings, but must pay tax at a rate of 30 percent, plus a penalty of 30 percent of the unpaid tax.
The Government declined to comment on the results of the amnesty. However, it has made clamping down on "black money" a high priority, and it must be disappointed that the scheme will recover just USD350m in tax (based on current estimates), given India's vast population.
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