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Issuing a stern warning to those indulging in black money generation and laundering, Union Finance Minister Arun Jaitley on Friday said with all the countries coming together to make monetary transactions transparent by 2017, they will have no place to hide. 

Mr. Jaitley, on the occasion of the Enforcement Day, said in the second week of May the government intends to take up before the Parliament the law on taxation of undisclosed assets and incomes abroad. 

The Finance Minister said the global trend today is a liberal economy allowing everyone to earn and grow in an enabling environment, and all these should be an incentive to avoid the temptation of violating the law. The message to assessees, including commercial businesses, is clear that in a liberalised economy with reasonable or even lower tax rates, they should go straight.

Citing the G-20 initiative on automatic transmission of information and the U.S.’ strong action under its domestic law with regard to information on monetary transactions, Mr. Jaitley said the target is to make all the transactions transparent by 2017. “Each country will go out of the way to cooperate with others in bringing violators to book,” he said.

It would be extremely risky to have illegal assets or make unlawful transactions. “We have to prepare people in our country for it… we have been taking steps to squeeze unlawful assets and transactions within and outside the country,” he said.

Mr. Jaitley said one of the reasons for the country’s strong foreign exchange reserves was its ability to have a deterrent in the system against unlawful flight of foreign currency. 

“We are net buyers of oil, edible oil, pulse and electronic items. These are essential items for which we do require a large amount of foreign exchange. We cannot afford to deplete our resources because if they go down the value of our currency too weakens. To a large extent, rupee is amongst the few currencies which have struggled to keep pace with dollar,” he said, adding that most of the other currencies have depleted substantially.

Addressing the Enforcement Directorate officials, Revenue Secretary Shaktikanta Das identified three major challenges for the agency, including hawala transfers together with trade-based money laundering, floating of companies to turn the black money into white and avoid capital gains tax, and Ponzi schemes.

“In the recently passed Finance Bill, there is a provision under the Prevention of Money Laundering Act providing for restitution of assets,” he said. The provision would enable the victims of Ponzi schemes to reclaim their investments.