The Hindu : BJP against Mauritius as tax haven route

Online edition of India's National Newspaper
Tuesday, Jan 07, 2003

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BJP against Mauritius as tax haven route

By Our Special Correspondent

NEW DELHI JAN. 6. The Bharatiya Janata Party is against allowing countries such as Mauritius to be used as tax havens by business houses and companies from "third countries".

Apparently, one of the recommendations expected to be made by the Rajnath Singh committee — set up by the party to study the Kelkar report — is that while avoidance of double taxation through bilateral arrangements with different countries was welcome, such agreements should not be allowed to be misused by companies from "third countries" which merely register their firms in countries where such arrangements exist to avoid paying tax. Although Mauritius may not be named by the committee, some members hinted that it was well known that the agreement with that country was indeed being misused.

A political controversy over the issue had erupted involving the then Finance Minister, Yashwant Sinha, whose daughter-in-law was a senior executive in the investment firms that were routing their investments in India through Mauritius.

The BJP was also against the withdrawal of the one rupee cess on every litre of petrol as the funds were being put to good use for the "golden quadrangle" road project. There is also a view that the Government should build on the one-sixth compulsory tax returns idea, implemented successfully, to expand it to new districts and smaller cities to help widen the tax net.

A committee member claimed that it was not fair to say that the BJP wanted to retain all the Kelkar proposals on lowering of taxes and add to it its own proposals for a further reduction. The party was aware of the need for revenue collection and its final report, expected to be completed in a couple of days, would "not be irresponsible".

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