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Black money


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Black money

  1. 1. Black MoneyThe toll free expressway of global economiesByMuzahid KhanIntegrated BBA+MBA (Oil & Gas Management), Semester VIII, 2011.University of Petroleum & Energy Studies, Dehradun “Three years after the horrific financial crisis (in 2008), caused by financial fraud,not a single financial executive has gone to jail, and that’s wrong”- Charles Ferguson. The above statement is quoted not to defame the decorum of a profession; rathersaved as a connotation of the power of finance and its impact on money, business andglobal economy. Its supremacy lies behind in being very similar to a double edgedSamurai sword. Not only can it be used to increase shareholders wealth but also enablesto magically conceal taxable wealth off the government’s watch. The civil society call itas Black Money, however there exists no black magic where one can cast somefinancial spell and make real estate properties and currency notes disappear in to thethin air. Black money lies as the fine line of distinction between tax avoidance and taxevasion, deliberate on their definitions the former entails spotting of loopholes in theexisting taxation system while the later entails digging additional fissures against thelaw to escape taxes. With the advent of globalization and information technology, of course, theboulevard of Black money has turned to a toll free expressway of a globally integratedeconomy and thus keeps on moving in and out of economies without scrutiny. With theadvancement of time various treaties have been signed and regulations implementedbut could not much stop the shadowing of illegal money. Governments falling victim tosuch financial catastrophe of black money tried laying spikes on these highways whichof them most often were by passed by tax havens like Switzerland to be least obvious. Apart from Switzerland many other smaller economies are emerging to sheltercash and have also designed better financial vehicles to ride smoothly through this darkalley. Practices like money laundering, is still an ongoing street crime committed not bythe chain snatchers or pickpockets but it is a game of the riches. Unrestrained outflow of black money can dilute even the most stable ofeconomies and shall pull it down to necropolis. It is necessary and indispensable to takemeasures to break the system which is the integration of many smaller networks takingroots from a country’s financial system, civil society and legal system to avoid anyfuture crisis. And to break this system in the broader sense, one needs to identify and fixthe legal rules of this illegal game.