Campaign Against Black Money: Modi Govt Plugs Indo-Mauritius Tax Treaty Loopholes
It redounds to the credit of the Modi
government, particularly its Finance Minister Arun Jaitley that it has ended
the three-decade-old farce called Indo-Mauritius Double Taxation Avoidance
In 1983, India bartered away the country’s interests presumably for saving and promoting its crooks in the name of attracting foreign investments via the island nation.
Normally, capital gains tax earned by selling shares in Bombay Stock Exchange, for example, is taxable in India as it is an Indian income. But the treaty assigned the right to tax this income to Mauritius. And Mauritius in a manner of double take quietly abolished capital gains tax in its country post-haste thus playing dog in the manger to the hilt. Those in the know say that the Indian government was not backbitten but was played footsie with by the Mauritius government wink-wink nudge-nudge. Be that as it may.
The Modi government on Tuesday (10 May 2016) righted this patently inequitable regime by grandfathering its benefits. Shares of Indian companies purchased after 1 April 2017 will suffer short term capital gains tax in the hands of residents of Mauritius at half the rate normally applicable to Indian residents till 31 March 2019 and at par with the rates applicable to Indian residents come 1 April 2019.
This would be a small feather in the cap
of the Modi government on the black money front as it would end round-tripping
of Indian black money into India via Mauritius. It is common knowledge that bulk of the money
flowing into India via Mauritius belongs to Indian politicians and
But the world of black money is not worried because if the Mauritius door is shut, others are open in Tunisia, Panama, Seychelles, etc. G-20 and other initiatives should similarly carry its war against rogue nations completely so the peace-loving nations can feel secure against the scourge of black and illicit money.
And in the fight against black money and
money laundering, there is an elephant in the room - chartered accountants. Lawyers in juxtaposition emerge like saints
because while lawyers get acquittal of crooks through legal sophistry and
exploitation of loopholes, it is the chartered accountants who are complicit in
financial crimes of their clients. In
other words, a lawyer emerges on the scene after a crime is committed and his
client caught whereas a CA is a guiding spirit behind a financial crime
itself. It is he who studies the
loopholes in law as well as the greener pastures albeit thousands of miles
abroad and whispers wisdom into the ears of his client. In fact, the Panama papers, as well as, the
Tunisian connection in the Agusta scam bear ample testimony to the insidious
role played by the CAs. Time has come
for national governments to wake up and stop indulging the professionals.
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.