BLACK MONEY AND TAX EVASION: EXAMINING THE CHALLENGES FACED BY TAX AUTHORITIES

AUTHOR – PRIYA, STUDENT AT ASIAN LAW COLLEGE

Best Citation – PRIYA, BLACK MONEY AND TAX EVASION: EXAMINING THE CHALLENGES FACED BY TAX AUTHORITIES, ILE TAXATION LAW AND LEGAL STUDIES (ILE TLLS), 1 (1) of 2023, Pg. 28-34, APIS – 3920 – 0024 | ISBN – 978-81-961120-5-9.

ABSTRACT

The issue of black money and tax evasion poses significant challenges to tax authorities worldwide. This article explores the complexities surrounding the phenomenon of black money and the various strategies employed by individuals and entities to evade taxes. It delves into the critical role played by tax authorities in combating these illicit practices and highlights the major challenges they face in effectively curbing tax evasion. The article begins by providing an overview of black money and tax evasion, emphasizing their adverse impact on economies, public finances, and societal trust. It discusses the reasons behind the creation and accumulation of black money, such as illegal activities, corruption and illicit financial flows. Furthermore, it explores the methods and mechanisms employed by individuals and entities to evade taxes, including offshore tax havens, complex financial structures and underreporting of income. The focus then shifts to the challenges faced by tax authorities in their efforts to combat black money and tax evasion. The article highlights the international nature of these issues, necessitating robust cooperation and information exchange between jurisdictions. It examines the difficulties associated with identifying and quantifying black money, given its covert nature and the sophistication of tax evasion schemes. Moreover, it discusses the hurdles faced in investigating and prosecuting tax evaders, including legal loopholes, limited resources and the complexity of cross-border transactions. The article also addresses the role of technology in tackling tax evasion. It explores how advancements in data analytics, artificial intelligence and blockchain can assist tax authorities in detecting suspicious financial activities, uncovering hidden assets and tracing illicit flows of money. It emphasizes the need for investment in technological infrastructure and the development of specialized skills to effectively leverage these tools.

KEYWORDS: Black Money, Tax Evasion, Government, Tax authorities and Approaches