BREAKING NEWS

In need of cash, India chases $117 bln in elusive back taxes

By REUTERS

APRIL 18, 2016 02:17

Updated: APRIL 18, 2016 02:16

NEW DELHI - India's finance ministry is asking for regular progress reports from tax collectors and has set a date for an amnesty to pay off arrears on undeclared domestic assets, as the government intensifies efforts to meet its ambitious deficit target.

A series of announcements in recent weeks aims to streamline tax collection in a country where the tax-to-GDP ratio, at 16.6 percent, is among the lowest among emerging economies. Only about one in 18 earning individuals pays tax.

Arrears now amount to some $117 billion, roughly four times what they were six years ago.

Yet one tax official estimated only 15-20 percent of that was realistically recoverable, with many major debtors simply unable to pay. Even the lower target would take years to achieve, he said, given India's sluggish legal process.

Tax officials may go increasingly after entities they think can pay, with possible repercussions for long-running disputes between the government and companies such as Vodafone and Cairn Energy.

The need for money is pressing.

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