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Created on Thursday, 02 August 2018 18:08
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(Edited Image. Courtesy: Deloitte)
Legitimatization of Virtual /crypto-currencies (VCCs) is set to gather pace with G20 lauding their benefits while seeking regulations to prevent their misuse.
Tax authorities in developed countries and emerging economies including India have legitimized VCCs by taxing VCC-based transactions. They look for new opportunities to widen the tax net on VCCs. There anonymous ownership makes them easy option for tax evasion.
As put US Internal Revenue Service (IRS) in a reminder dated 23March2018 to taxpayers, “Virtual currency (VC), as generally defined, is a “digital representation of value that functions in the same manner as a country’s traditional currency. There are currently more than 1,500 known virtual currencies. Because transactions in virtual currencies can be difficult to trace and have an inherently pseudo-anonymous aspect, some taxpayers may be tempted to hide taxable income from the IRS”.
International Monetary Fund (IMF) has also pointed out that VCs have a high potential as a means for tax evasion. It notes: “This is particularly the case with cryptocurrencies, where participants need not disclose their identity, and transactions are peer-to-peer and can take place across borders. Given that tax evasion is already illegal in most jurisdictions, the key problems in this area relate to developing effective means of enforcement”.
Monetary authorities, on the other hand, have not formally recognized VCCs as legal means for commercial transactions in most countries. Many have, however, allowed them to mushroom and flourish. A few jurisdictions such as the ones in Indonesia, Iran and India have frowned upon them.
Central Banks know decentralized VCCs might pose a challenge to sovereign currencies in the long run. Some of them are thus themselves considering launching their own digital currencies.
The tone for guarded promotion of VCCs has been set by G20 Meeting of Finance Ministers and Central Bank Governors (FMs-CBGs), who met in Buenos Aires for two-day conference ending 22th July 2018.
Read more: Regulation of Virtual Currencies Would Be A Cat-&-Mouse Game
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Created on Monday, 05 March 2018 04:32
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(image courtesy: https://www.narendramodi.in/examwarriors)
Facts become the martyrs when politicians play blame games. Obscure facts are getting buried under the impact of fierce mud-slinging between Modi Govt-BJP camp and the Opposition especially the Congress Party over PNB scam.
Fact is that the scam is unintended bhagidari of BJP and Congress regimes. The ecosystem for scam was jointly conceived by both without anyone realizing that it would be misused by Nirav Bhai, Mehul Bhai and their ilk.
The second fact is that bond between diamond business and Prime Minister Narendra Modi is too entrenched to be brushed aside as dirty politics. Third, accountability has to be fixed right from PNB to the PMO. They either overlooked or took in stride banking frauds that were even pinpointed by a RBI Deputy Governor at a conference in 2016. More of this later.
Ideally, the Supreme Court should step in and constitute a special investigation team (SIT). It ought to oversee full-fledged probe into a web of willful loan defaults, money laundering & cheating cases within the diamonds sector.
Read more: Blame-Game Over PNB Scam Tramples Truth
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Created on Monday, 12 December 2016 18:20
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(A Security Feature of Plastic Note. Image Courtesy: innoviasecurity.com)
Demonetization has turned torchlight on alarming loopholes in India’s currency defences. This calls for a thorough check of successive Governments’ failure in producing secure, easily authenticable and forgery-resistant currency.
The independent probe should also study mismanagement of demand and supply of currency as evidenced by serpentine queue of citizens outside banks/ATMs and associated tragedies.
The review should serve as foundation for launch of a ‘Make In India’ mission to indigenize the entire value chain from developing bank note design software to detection of counterfeit notes.
Forgers have repeatedly certified the Government’s failure on the currency front, which has a direct bearing on the national security. They have produced and pumped into market fake Rs 2000 notes, even as countless citizens were praying for an opportunity to touch and feel the new notes.
The new notes are akin to old wine in new bottle as they are bereft of new security features, which are the key to keep counterfeiters at bay. As admitted by the Government in Parliament, the new series bank notes are merely “different from the old ones in terms of look, design, size and colour”.
Facts are too strong to shatter the myth that demonetization is essential to fight counterfeiting of high denomination notes and their usage by terrorists.
Read more: Plug Chinks in Monetary Security by Reinventing Rupee-Making Biz
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Created on Friday, 25 November 2016 07:27
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(Image Courtesy: DAVP)
Provide 100% Insurance Cover for Bank Deposits
“The Scheme of compulsory deposit is somewhat novel and unorthodox, which we have had to undertake in the situation created by the Emergency.”
This is not a peek from our beloved Prime Minister Narendra Modi’s wished-for reply to Rajya Sabha debate on demonetization. This quote is from the speech given by Late Morarji Desai, Finance Minister, in Lok Sabha during April 1963 while moving the Compulsory Deposit Scheme (CDS) Bill.
The difference between the previous CDS’ (1963 & 1974 ones), and the present one, is as big as the gulf between democracy-cum-cooperative federalism and dictatorship-cum-State trickery.
Demonetization of Rs 500 and Rs 1000 notes is a fig leaf for unannounced compulsory deposit of citizens’ all savings, implemented without imposing emergency of any type. This open-ended CDS is not provided for by any law, unlike the two previous ones for which specific laws were enacted.
Moreover, the Government has inflicted a surgical strike of austerity that has left millions underfed. It has rendered millions jobless. It has reduced vibrant life to a battle for survival. The Demonetization-induced deaths and injuries has no parallels in the modern history.
The cumbersome procedure for withdrawal of Rs 2.5 lakh for meeting marriage expenditure by either groom or bride family reeks of Guest Control Order of the sixties & seventies.
Imposition of austerity on masses under the garb of fighting black money is a masterstroke. It has enabled Government to abdicate its responsibility to cut its own expenditure and delay further disclosure of reports of Expenditure Management Commission (EMC).
Read more: Bring Legal Clarity to Demonetization-masked Compulsory Deposits
