Indonesia Shows the Way

While being interviewed by Shereen Bhan ( CNBC TV18 ), two days back , Ruchir Sharma said :

" At 50 % tax rate , I do not expect much hidden / unaccounted BLACK MONEY to get declared by Indians , under recently amended Income Tax Act ( PMGKY Amnesty Scheme )

On the other hand , Indonesia succeeded in unearthing US $ 200 billion worth of BLACK MONEY  {  US $ 200 Billion = approx Rs 136 lakh*crore  } , in last few months

Of this , some $ 30 billion of black money got declared by son of late president Suharto "

Even the Indonesians who are used to Tsunami , were caught unprepared by this unprecedented tide of BLACK MONEY , washing over their shores , from all over the World !

What brought about this " miracle " ?

No rocket science here . Indonesian government believed in the

 " Power ofGreed "

{  http://myblogepage.blogspot.com/2015/10/from-greed-to-great.html  }

They told the BLACK MONEY hoarders :

" Declare your hidden wealth and pay just 3 % income tax ( to be raised to 4 % after 9 months ! ) "

Our own recent track record is as follows :

*  Last Undisclosed Assets Declaration Scheme @ 60 % tax + Penalty =   Rs 50,000 crore

*  From Rs 75K Cr deposit in Jan Dhan A/C since 08 Nov ( @ 50 % tax )= Rs 50,000 crore

So , Indonesia beats us , Rs 136 lakh*crore  to  Rs 1 lakh*crore  !

This Indonesian Miracle must be viewed in light of following estimates of India's Black Money :

 *  Stashed away abroad between 2005-2015  = $ 50 billion ( Rs 35 lakh*crore )

*   At 12 % of GDP ( $ 2300 Billion ), our BLACK MONEY economy = $ 276 billion

  (  Rs 185 Lakh*crore )

Now imagine , if we too had offered PMGKY ( Prime Minister's Gareeb Kalyan Yojana ) , to our black money hoarders , at 5 % tax rate ( instead of 50 % announced )

We could have managed to get them to deposit / declare , Rs 100 lakh*crore ( out of Rs 185 lakh*crore ) , with 90 % amount being declared by " You know Who ? "

And  government would have collected , Rs 5 lakh* crore  by way of tax

Perhaps enough to abolish Personal Income Tax from 2017 onwards !

We could have done much better than Indonesia - and 5 years ago - had UPA government considered my following blog / suggestion :

THURSDAY, 9 JUNE 2011

MagicWand ?

{  http://myblogepage.blogspot.com/2011/06/magic-wand.html  }

May be Shri Arun Jaitleyji could still consider it for the forthcoming Union Budget

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24  Dec  2016

www.hemenparekh.in / blogs