Bill to bring back black money

The Undisclosed Foreign Asset and Income (Imposition of Tax) Bill, 2015, is another piece of legislation that secured an easy passage in Parliament in the just concluded Budget session. According to Nigam Nuggehalli, an expert with Azim Premji University, Bangalore, under the provisions of the Bill a person found guilty of wilfully evading taxes can expect to go to jail for a minimum period of three years and a maximum of 10 years. But he has also discovered that the Bill identifies and provides for offences and Prosecutions that have already been accounted for in the Income Tax Act, 1961. To quote him: “It is hard to see what purpose this Bill serves other than to enable the current government to make a political statement that it is tough on black money stashed abroad.... the harshness of criminal sanctions has hardly had any effect on crime in other domains in India. Even in the case of tax evasion, the Income Tax Act already provides for a maximum punishment of seven years imprisonment. Increasing the maximum length of incarceration to 10 years is hardly an innovation.” With the Prevention of Money Laundering Act, 2002, already holding the field, the need for another law to deal exclusively with black money stashed abroad is considered superfluous, especially when the Modi government is committed to repealing obsolete and redundant laws.

The legal approach to black money stashed abroad is similar to the amendments the Cabinet approved on April 30 to the Prevention of Corruption Act (PCA), 1988. The proposed amendments to the PCA provide for classifying corruption as a heinous crime and awarding longer prison terms for both the bribe giver and the bribe taker. The proposal is to increase the minimum sentence of imprisonment from six months to three years and the maximum sentence from five years to seven years. Experts suggest that it is not the toughness of the law but how it is enforced that is the key to its effectiveness. Enhancement of punishment, they say, has often resulted in poor enforcement of laws.

On May 13, the NDA government pushed through a set of regressive amendments to the Whistle Blowers Protection Act in the Lok Sabha despite the “very vocal and well-reasoned objections of the opposition”, as one observer put it. These amendments, according to Venkatesh Nayak, an expert with the Commonwealth Human Rights Initiative, New Delhi, take away the immunity of whistle blowers from prosecution under the Official Secrets Act, 1923 (OSA), which is part of the original Act. Secondly, they prohibit a whistleblower from making any complaint about corruption if it relates to any of the grounds mentioned in Section 8(1) of the Right to Information Act, which relate to national security, relations with foreign states, trade secrets, intellectual property rights, investigation and prosecution for criminal offences, contempt of court, intelligence informers, trust based relationships such as lawyerclient, doctor patient (fiduciary relationships), Cabinet notes, and privacy of an individual. Thirdly, they prevent the competent authorities from inquiring into any such complaint, and any person from providing assistance to the competent authorities to deal with such complaints. Such amendments have led to widespread resentment among activists.@frontline.in