New Delhi – According to the finance minister Arun Jaitley, demonetization along with GST would solve the black money problem. This is because these two events together would make any cash transaction difficult. He added that eventually, GST implementation would lead to tax expansion as well.
Jaitley claimed that the Central Government has decided to come up with laws to control the International black money. Additionally, the combination of GST and demonetization would deal with the problem of black money in the domestic front. Cracking down the shell companies would become much easier now that the newest tax system has been implemented.
According to the recent conversation with Arun Jaitley, India had merged into a standard system now. He said that each year a desperate helplessness had been noticed in an attempt to take care of the situation where tax noncompliance had become a regular event. By launching Finance Bill, the Government would declare some changes. However, apart from some marginal impact the bills never succeeded in yielding any lasting result. Jaitley said that a transformation in the finance system was required for the sake of significant result.
He had urged the country to look at the events in totality rather than as single events. Once all the facts are put together, the proper impact could be noticed. People would be able to realize the moral rationale behind the decisions the Government had taken.
The impact of demonetization added with GST would make cash transaction a lot more difficult than it was before. It is hoped to lead better compliance and better digitization. Jaitley also claimed that the first sign of the transformation in the form of tax expansion and digitization had already come to notice.
Penal action against the people who used an International bank account to stash away money had been the first significant step towards a better financial reformation, said Jaitley. He added that the previous system had been easy and thus creating a shell company to layer financial transaction could be done without much trouble.
The process of layering money had become a regular affair due to the easy format of the financial system. The business owners, as well as the politicians, took advantage of this system immensely.
Jaitley hinted that a detection process is about to be held along with the decision to summon the property law related to benami property would surely be a deterrent. The discussion regarding this decision is already on the table.
He said the faster the shell companies collapse, the better it is for the economy of the country. The amended property law is going to be a tremor down the spine of the people who exploited this law to make money and stash the loot illegally.