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Indians disclose US$10b in hidden wealth
[NEW DELHI] Indians have declared almost US$10 billion in hidden wealth under a government amnesty on tax evasion, as part of Prime Minister Narendra Modi's moves to crack down on huge piles of black money.
Finance Minister Arun Jaitley said the four-month scheme that closed on Friday had resulted in 64,275 declarations of previously undisclosed assets and income, totaling 652.5 billion rupees (S$13.4 billion).
"With so many people declaring money it shows a significant number of people want to become tax compliant," Jaitley told reporters in New Delhi on Saturday.
"This figure could be revised upward once the final tabulation is done," the minister said, adding that the additional revenue would help fund public welfare schemes.
India's taxpayers are startlingly few, with only around 2.5 per cent of its 1.2 billion population filing returns - largely because the so-called unorganised sector employs so many people who are paid cash.
Modi vowed to crack down on tax avoidance to tackle the country's yawning inequality after storming to power at elections in 2014.
His government introduced a slew of rules this year including making it mandatory to declare a unique taxpayer number when purchasing goods over 200,000 rupees.
Under the scheme, authorities promised not to pursue Indians in return for coming clean on hidden wealth and paying tax on it.
But accountants and other experts remained sceptical about whether Indians would cough up their wealth. The government did not announce a public target for the initiative.
Across all levels of society, rounding up tax is difficult when dodging it is practically a national sport, from small-time landlords who request rent in cash to large-scale money laundering via state lotteries.
Only six people earning over 500 million rupees filed returns in 2012-2013, despite there being an estimated 2,100 ultra-wealthy Indians whose net worth exceeds US$50 million.
Billions of dollars in unpaid taxes deprive the government of revenues that could be spent on changing lives in a country where 270 million people survive on less than US$2 a day, according to the World Bank.