How govt is dealing with tax evasion, corporate fraud
Wideningscopeofdisclosurerequirementsamongstepstakento ensure transparency
New Delhi: Tax officials have an embarrassing admission to make—94% of the ₹ 9.3 trillion outstanding direct tax demand as of December 2017 is difficult to recover because assessees are not traceable. These untraceable entities have played a big role in generation and laundering of unaccounted wealth by entering into bogus transactions on paper and cash deals. Prime Minister Narendra Modi, who is committed to a minimum government machinery, is pursuing a simple but effective strategy to deal with corporate fraud and tax evasion—higher transparency in the affairs of companies. Some of the recent measures taken by the government throw more light on the conduct of companies, especially on corporate ownership and the way funds are routed. Experts said that in the process, genuine businesses are also denied some operational flexibility. Mint takes a look at some of these measures and their significance.
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