Black money is made against the law from the underground community and there's an urgent necessity to battle whitening of black money. The taxes of black money is certainly not paid, and this has an incredibly undesirable effect on the overall economy. The authorities needs to have the income to run all its services which are allowed to it's people.
There is numerous black money placed in foreign accounts. Even though the funds is delivered back to the country, it is not reported to the government and the government continues to lose revenue. No matter how the funds was obtained; illegitimately, through bureaucratic problem or political problem, it's still black money. Black money also is produced by black market. Black money has long been distributed in the formal market and in the parallel black market, which oftentimes make it hard to steer clear of the vice. Whitening of black money is very rampant, and it appears to be growing every day.
Whitening black money indicates that the government is promoting the vice, and that is the government has been doing to make certain that the vice will not spread even further. This increases tax evasion, and it promotes further acquisition of the black money. It promotes corruption as the government knows what exactly is happening, but it can't do something.
White of black money can be reduced by reducing the disincentives towards voluntary compliance. Any additional tax costs that the government charges on companies cause businesspersons avoid tax leading to black money . Confusing polices and procedures get people to evade taxes. One way of decreasing the possibilities of tax evasion and black money is minimizing a few of these laws and lowering the cost the businesspersons need to pay. The procedures needs to be made a little easy for the entrepreneurs so they don’t result in the tax evasion and underground community and black economy.
Liberalization of economy is also another way of reducing whitening of black money. Long delays in obtaining licenses and permits are what exactly make persons to end up with black money. The good thing is to reduce the long methods. Liberalization is exactly what stimulates compliance and enables the government to collect taxes and cater for all the services that its services need.
The National revenue board should be strengthened to achieve all the potential income taxpayers and this should be carried out without having bias, regardless of whether racial, political or even economical. It doesn't matter if the money is white or black. So long as the money is taxable. It should be taxed. The body that copes with corruption must be strengthened to be capable to handle all of the corruption issues.
Right now that you know what exactly lack cash is all about, you need to avoid the vice as much as possible. The judicial system is trying to have all cases executed without having bias or favor. The most crucial step that the government should take is to stop shielding the criminals and dealing accordingly with the ones that have already been caught. For the good of the economic climate, we should all condemn this.