The impact of the demonetization drive and the rollout of the goods and services tax will make it tough to deal in cash, leading to greater compliance, digitisation and widening of the tax base, Union finance minister Arun Jaitley said.
The net impact of the demonetisation exercise coupled with the GST exercise… will certainly lead to greater compliances, greater digitisation. The first signs of greater digitisation, expansion of the base of direct and indirect taxes are already visible.
There was a very large amount of tax noncompliance, huge amounts of transactions outside the system, and almost a helplessness in trying to deal with the situation.
If we look at the totality of the various steps we have taken, rather than look at them in a conjoint manner, each one of them is decisions which will not only have a long-term impact but also have an ethical rationale behind it,” he said.
He said one easy format of converting black money was shell companies. “This has almost become standard operating procedure. This was not only used by people in businesses, it was used to round-trip corruption money by politicians, civil servants, and others
The FM said the government was “actively working” on the electoral bond mechanism, but no party had come forward with a suggestion to make political funding transparent. “For the last 70 years, India’s democracy has been completely funded by invisible money and elected representatives, governments, political parties, Parliaments, and, I must say, even the Election Commission completely failed in checking it,” he added.
Source: Times of India