Tax evasion by corporations is a new frontier for Indian authorities and their investigations are ramping up as the country’s new finance minister, Prakash Javadekar, moves to combat tax evasion.
Indian officials said the government is working with the multinationals to curb tax evasion, a crime that has caused major economic losses and created huge black holes in India’s tax coffers.
Javadekar has set up a committee to investigate the issue, but the move is expected to be met with stiff resistance by multinationals that have long complained about tax evasion in India.
As a result, the finance minister said in a statement on Monday that he would establish a panel to look into how to fight tax evasion by companies and individuals.
The finance ministry also announced plans to strengthen the Indian Tax Authority, a powerful tax agency that is in charge of enforcement of tax laws.
India is one of the world’s most expensive tax jurisdictions, with multinationals claiming the vast majority of profits and taking a majority of the tax, but it is one where the rich and the well-off often escape the taxman’s wrath.
Javadkar announced a slew of measures aimed at curbing tax evasion during his maiden speech to Parliament on Friday.
He pledged to raise the number of tax inspectors from 50,000 to 1,500.
He said the finance ministry would increase the tax base of the country by 40 percent over the next three years.
But he also called for reforms that would benefit the middle class and the poor.
To that end, the government will set up an inter-ministerial committee to tackle tax evasion and bring in the best technology to fight it, the ministry said in the statement.
The plan comes amid increasing public anger over the tax evasion that has hurt India’s economy and contributed to a spike in job losses.
Indian lawmakers and business leaders have called for a crackdown on tax evasion at a time when economic growth is slowing and the country is facing a budget deficit.
A report by the Organisation for Economic Co-operation and Development last month found that about a third of Indian companies were being asked to pay higher tax rates than the average of the countries they operate in.
On Monday, Javadkar said the country was working with multinational corporations to combat the problem.
“The tax authorities are investigating how to combat this problem.
We have decided to set up the panel to study how to bring about reforms,” he said.
Corporate tax evasion is a crime in India, but most companies don’t pay taxes on their profits.
India’s government has been working with big multinationals for years to crack down on tax avoidance.
The tax authorities said last month that multinationals owed more than $1 trillion in taxes in India in 2016, a rise of 30 percent from the year before.