Union Finance Minister Nirmala Sitharaman on Sunday informed that the Centre 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. In an address at the Nani Palkhivala centenary celebrations in Chennai, Sitharaman said decriminalising corporate laws, settling tax disputes and rapid privatisation of state-run firms were among the steps the government was taking to achieve the goal.
“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. Such a major announcement comes just over a week before she presents the union budget for FY21 in Parliament.
The Centre 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 rigours of compliance and to improve ease of doing business. About 44 offences under the Act are under consideration for amendment.
Nirmala Sitharaman's assurance can be seen 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.
Nirmala Sitharaman would table the Union Budget on February 1 in the Parliament at a time when the economy is under severe stress. GDP growth, according to the government's own estimates, is expected to fall to 5% for FY2019-20. The Centre has slashed corporate tax rates, rolled back additional taxes on the rich and have injected fresh capital into stalled housing and infrastructure projects over the last couple of months.