The Great Tax Wall of India

The Great Tax Wall of India

 The Government of India has suddenly woken up after a long Rip Wan Winkle sleep. It realized too late that the concessions given to foreign direct investors through tax havens like Mauritius were being used to launder Indian black money.  Unpaid taxes, money obtained through fraudulent schemes, money laundering, bribery, political corruption, under invoicing of export, speculation, slush money and what not, are being quietly brought back to India to buy up more money, land or power.  Of course most of the money is being mostly used for buying influence and paid into the wide pockets of politicians who in turn transfer it abroad to have it later brought back through the same method, to buy more influence and pay off the law agencies to look the other way.  Meanwhile some political parties flooded the media with reports of vast sums of money (Rupees 12,000 crores, it is said) stacked away by Indians in Swiss banks.   And the poor Income Tax people want to dig up the vaults of the Padmanabha swami Temple in   Trivandrum (Kerala) as if the Swiss have secretly deposited Indian gold there!

It is now clear that billions of dollars have been white washed and hung out to dry in tax havens. These criminal masterminds populate plush apartments in luxury hotels in Dubai, Colombo, the Bahamas, the Barbados, Cyprus, Mauritius, Bangkok, Singapore and elsewhere.  Only the omnipresent sleuths of the US Treasury burn the midnight oil, tracking the traces left by bad dollars that go to finance the empires of the drug cartels. Little do they care that most of the illegal money laundering is based on the free flow of cash that is generated in India. You do not require of the ubiquitous ‘ISI’ of Pakistan to ruin the Indian economy.  Indians are very self sufficient in financial frauds, thank you.  We are perfectly capable of both tremendous economic growth and massive economic ruin. And we are proud to have London School of Economics and Harvard experts to oversee the fall of the Great Indian Rupee Empire. Now you need a sack full of rupees to buy a dollar!

The Supreme Court of India threw out the case against Vodafone as technically unsustainable; the Indian Government could not levy a hefty tax on proceeds of a sale of majority shares between two telecom companies that did not take place in India.  So what prompted the Finance Ministry to stealthily draft the “Vodafone” tax Bill to ostensibly rein in international skullduggery by MNCs? Nothing within the tax laws in India justified the Indian move.  So they made the new Act and gave it retrospective effect just to squeeze the telecom companies some of their ‘ill gotten’ money. 

Following the resignation of Pranab Mukerji as Finance Minister on 26 June, some suspicious moves were made by some Finance big wigs.  The Finance Ministry Mandarins hastily drafted the bill and leaked it through the media till the Prime Minister’s Office caught them in the act.  It appears the poor PM was not shown the draft despite having taken over the burden of the Finance Ministry on his fragile shoulders. Why the haste? It does appear the Revenue people are hungry to get their hands on the 20,000 crore rupees that Vodafone is supposed to pay as back taxes. But it does not gel easily with Indians who like to analyze and speculate the hush-hush of money deals. Wise and money savvy Indians had supported the tremendous growth of Reliance.  So, it appears that someone within the Finance Ministry could stand to gain from the passing of the bill.  Or are the political brokers putting the pressure on Vodafone?

The permit Raj created by this new Great Tax Wall of India would make the harassed Indian industrialists to make a bee line for the Finance Ministry.  And then the mandarins can play their Game of Foxes and open a casino in North Block.  Flush funds could flow into personal accounts in Swiss banks of bureaucrats and make them invulnerable to the machinations by the unwashed politicians who till now had the upper hand in the open handed piracy of industrial India.   Who does not know that selling and buying influence is better than dealing in stocks and shares on Dalal Street?   The government had often boasted that they dismantled the “Permit Raj” whereby the  nexus between corrupt officials and corrupt politicians made  the Indian citizen run around in circles, till a hafta ( bribe) was quietly paid.   So the hapless telecom companies refused to pay ‘proper respects’ to the powerful mandarins and political brokers.  It was very foolish of them.  A donation to the politicians or their parties would have saved them all this embarrassment, harassment and saved them millions in attorney fees.  Their attorneys did not read between the lines in the Bofors case, which was quietly buried in some unmarked grave in the Alps.  So have numerous tax frauds and commissions and cases; disappeared into the caves of the gnomes in Switzerland.

 It must be remembered that it is not only African and Philippine despots who deposit their ill gotten gains of massacres in tax havens. The majority of depositors in Swiss banks are wealthy Indians who hate to drop even a paisa in the begging bowl of the Indian Government, as taxes. Are we not proud that among the biggest frauds in the World are Indian frauds, who have made their millions through all kinds of insider trading and cooking the books? When a man named Telgi offered to print stamp papers free for all Indians, the angry bureaucrats put him jail, poor chap.

 We do not need to teach our PM, simple economics or how to run the Finance Ministry. The more complicated taxes you have, the more frauds you create. My dear Indian citizen, at least be honest and pay your taxes regularly. Otherwise how can we pay the Russians for all the junk we have ordered? And Anna has already made ‘hazare’ statements on how corruption is eating away the innards of our nation. We need to breach the Great Tax Wall and let in some fresh air before another “Bhopal tragedy” of poisonous corruption kills or corrodes our brains!