The government will decriminalise the Income Tax Act and the Prevention of Money Laundering Act (PMLA) as part of steps towards taking the country to a $5 trillion economy, finance minister Nirmala Sitharaman has said.
The minister said in her address on the ‘roadmap to a $5 trillion economy’ at the Nani Palkhivala centenary celebrations in Chennai on Sunday that decriminalising corporate laws, settling tax disputes and rapid privatisation of state-run firms were among the steps that the government was taking to achieve the goal.
The government has already identified the statutory changes to be made in the Companies Act to decriminalise several procedural lapses and those that do not affect public interest as part of efforts to reduce the rigors of compliance and to improve ease of doing business.
The idea is to amend about 46 penal provisions to either remove criminality, or to restrict the punishment to only fine, or to allow rectification of defaults through alternative methods, which would help to de-clog the criminal justice system in the country. The intention now, is to extend this exercise to laws dealing with income tax and money laundering.
“I have gone through this (Companies Act) with a comb. We are working to decriminalise companies and ensure that no other Acts including Income Tax Act and PMLA, have such provisions,” Sitharaman said in Chennai, The Indian Express reported. The minister’s assurance of rationalising penalty provisions in Income Tax Act comes just over a week before she presents the union budget for FY21 in Parliament.
The minister’s assurance that the government was moving towards a direction where every businesses is not looked with suspicion, is in line with Prime Minister Narendra Modi’s statement in his Independence Day speech last year that wealth creators should not be viewed with suspicion as wealth can be distributed only when it is created.
Modi had said in his address to the nation on the 73rd Independence Day that wealth creation was a great national service and that they should not be seen with suspicion.