Four-pronged strategy
The Paper suggested four-pronged strategy to curb generation of black money. These include more incentives for voluntary compliance of tax laws, reforms in vulnerable sectors of economy and creation credible deterrence.
It mentioned that reform of financial and real estate sectors would help in reducing generation of black money in long term as freeing of gold imports had helped in checking smuggling.
“Fine tuning of financial regulation remains one of the key areas in creating deterrence against generation of black money and detecting black money in the process of being laundered…Strengthening of other reporting regimes can allow appropriate systems for flagging of dubious transactions in future and improve the probability of their timely detection and prevention,” it added.
Money-laundering in corporates
In order to curb black money in the real estate sector, which accounts for 11 per cent of GDP, the Paper suggested that government should develop a nationwide data base, introduce TDS on sale of property and set up electronic payment system.
The White Paper has also made a case for tracking bullion and jewellery transactions, encouraging payment through debit and credit cards and prevent misuse of “off market” and “dabba trading” on equities and commodities market.
It said that in order to ensure transparent and efficient allocation of natural and man-made resources, including mines, land and spectrum, “oversight in the form of comprehensive regulations, independent regulator, and appointment of ombudsmen for grievance redressal…can be considered as a remedy.”
The introduction of Goods and Services Tax, it added, would be a major step in integrating the efforts of different agencies dealing with black money.
Detailed news link: here
Direct link to the whitepaper presented in Parliament: here