IS SWISS BANK A MIST OF INDIAN BLACK MONEY…???

SOP GROUP : 3MBA’11 – B BATCH

BLACK MONEY ??

Income on which tax is not paid and deliberately evaded

Received in cash, from underground economic activity

Recipients spend it only in the underground economy

Give the appearance of legitimacy through illegal money laundering

HOW BLACK MONEY GENERATED ??

Illegal, Immortal, Antisocial Transaction

Drug trafficking

Weapons trading

Terrorism

Prostitution

Selling counterfeit or stolen goods

TAX HAVENS

Money is parked in a safe place

Details of the client is kept secret

Switzerland, Mauritius, Seychelles, Bahamas, British Virgin Islands, Bermuda, St Kitts, Cayman Islands

Economy depends on Tourism and Banking

SWISS BANK ??

Large integrated financial services company located in Switzerland

Third largest in Switzerland with over 300 billion CHF of assets and 11.7 billion CHF of equity

SBC merged with Union Bank of Switzerland to form UBS

Largest bank in Europe & Second largest bank in the world.

Headquarters in Bern

UBS

UBS - LOGO

Confidence

Security

Discretion

Three keys symbolizing

WHY SWISS BANK???

Privacy – Non-disclosure of a/c holder’s identity

Low Risk – From 1505, no war, stable economy

High Security

BLACK MONEY IN SWISS BANKS

INDIA $1456 BILLION

RUSSIA $470 BILLION

U.K. $390 BILLION

UKRAINE $100 BILLION

CHINA $96 BILLION

SWISS ACCOUNT HOLDER’S DETAILS

Vilas Rao Deshmukh Ahmed Patel

WHAT MAKES BLACK MONEY THRIVE IN INDIA ???

Increased tax rates in India

Prevalent corruption

Higher rates of return in India

Feeble law enforcement and slow legal system

IMPACT OF BLACK MONEY ON ECONOMY???

Country doesn’t get its legitimate revenues due to tax evasion

Macro planning & Welfare measures go distorted

Affects foreign exchange reserve

Affects common man

Causes decrease in quality of public goods & services

Continue…

Higher taxation &inflation

Increase criminal activities

Affects real capital income & national income

Difficulty in the formation of monetary & fiscal activity.

SC’s DECISION ON BLACK MONEY

SC not satisfied in Govt’s action

Special Investigation Team appointed by SC

13 member panel

Headed by B P Jeevan Reddy, M P Shah

HOW TO CONTROL BLACK MONEY???

Conversion into white money

Voluntarily Disclosure of Income Scheme (VDIS)

PREVENTIVE MEASURE

Restructuring tax system

Severe punishments to errant tax officials

Use electronic media and bank for money transfer

Create awareness among people

CONCLUSION

Conversion of black money into white money is only a short term measure, but it is the preventive measures which can root out this evil permanently.