Swiss issue over Bank Accounts

When my son returned from school, he was pretty upset. Sensitive issues were conveniently dropped in my lap on the argument of it being a ‘man to man’ resolvable issue although his age was still in single digit. After delicate probing it transpired that all his classmates who until that day respected him were now making fun of him and it seems I was the cause. I mused, I had ensured his school was not for the elite  where the cars would have been in the unaffordable range for me. Now what did I do or not do to reflect on the social standing for my son? He made it stark clear in a direct way only children can. ‘I told my friends you have banks as clients and so you can open accounts in many many Banks.’ He was right. Being a consultant to Banks, I used to open business accounts in those Banks to get my fees fast by direct transfer. ‘You have accounts in Nationalised Banks, Private sector Banks and even co-operative Banks but not a single one in a Swiss Bank like some other Indian Uncles.’ he cried. I did not imagine that this sociopolitical issue would result in a prestige issue.

‘Son, did you realize that the Swiss account holders mentioned in the news are those with black money? I am a grandson of a Judge so law abiding actions are automatic for us.’ I did not tire him with the concept of Tax Deducted at Source (TDS) which ensured I followed the law. ‘Tell your clients to give you money soiled in coal so you too have black money’ came the innocent reply. I could not help but smile but felt sad that now having black money was an important social status than any other legitimate one like social leader or even sacrifice for the country.

‘Are Swiss Banks only for those who do not follow the law?’ he asked. Given the kind of publicity and their penchant of secrecy, more law offenders were their account holders but the Banks were genuine Banks is what I told him. I brought him uptodate that the policy change of secrecy is what resulted in the names of account holders being released. ‘If the amount is brought into India then will the flight of deposits of the Bank upset the balance of the Bank and make it sick?’ he asked in genuine concern. I replied, ‘Possibly’ as I imagined the Bank Chairman of a Swiss Bank trying hard to convince his authorities that he or rather his Bank was healthy. Perhaps in the history of the country a Bank may have to put up with this kind of test. I wonder what it may do to their currency later.

‘So, when are you opening an account in the Swiss Bank?’ he did not let go. ‘Why don’t I get you a Swiss chocolate instead and you drop the topic?’ I tried to bribe his silence. Once he said Okay, I jumped to get out of the door for the chocolate. As I reached for the door, he said, ‘Err Dad, can you get 40 pieces?’ I was aghast.’ 40 pieces will make you sick’. ‘Not for me Dad, for the whole class. I can tell you went to open an account and the Bank gave you chocolates as account opening gift and they will all keep quiet.’

Made Value, Attracted Tax (MVAT)

 ‘How big is your shirt pocked?’ asked the voice on the line before even either of us could say hello. For one second I thought my tailor had gone mad asking me what he is supposed to know. Then I recognized the voice of my friend who wanted to buy a house in my area from the same builder. ‘Do you want dimensions in inches or centimeters?’ I had accepted his quirkiness over time. ‘No.’ he almost shouted. ‘How much cash you cram in your shirt pocket?’ I was puzzled. In this day of plastic money and e-money, my friend was asking how much cash I can carry? ‘Maybe a hundred in tens or five hundred in hundreds’ I meekly tried to hide the allowance of conveyance my wife permits me. ‘That is exactly what I told the blokes sent by the builder. They are asking me to payRs.9.58 lacs for a flat I purchased in 2009. You think I carry that much cash in my pocket? is what I told them.’ I wondered, ‘It took him so long to realize he undercharged you or is he trying to fleece you now regretting he did not do it in 2009?’ I asked. ‘MVAT’ came the reply that shattered all suspicions to clear the picture. I pacified him by assuring to visit the builder’s office in the next hour because the ‘blokes’ of the builder were refusing to budge without the cash.

Anticipating our argument the builder slid a laminated copy of a news report stating that the VAT had to be paid. While I peered through my thick specs for a an answer in the news report, the builder started crying. ‘All I do is arrange the bricks in a manner that gives privacy and security so where did I create value? Perhaps I created profit for myself but definitely not value’ I knew he was just trying to distract an intelligent study when the solution struck me. ‘It does not say the buyer has to pay for it’. I threw the laminated paper on his desk and almost said, ‘ I rest my case’. Now even my friend’s brain was in overdrive. ‘Even I was not the first buyer and took it just at the time of completion from an investor so he must pay and not me.’ Now even I was amazed at this and looked at my friend with pride!

While we postponed the payment to a future date of a meeting of the residents of my friend’s building, I wondered what to anticipate if VAT was to be levied on principle of  value creation. I remembered by first year of college when we were introduced to time, place and form value. Based on this, the picture was so horrific that I would have to triple or quadruple my income to just retain my middle class standard of living. You can surely expect in future the following to be covered under VAT. It may be outlandish but so was the VAT on builders!

VAT on Bank Deposits : Because value is added directly to the deposit over time.

On vegetable vendor: Because vendor gives place value – bringing produce from farm to your house.

On Beauty Parlor: For adding beauty value to my wife. (Service tax which is currently levied will be replaced by VAT)

On salary: Since salary adds value to your style of living.

On your daily Newspaper: Because it adds value to your awareness.

On your haircut: Because it adds value to neatness of your head.

On Schools/Colleges etc.: Because it adds market value to your child by increasing his/her earning capacity. (service tax if any will be removed to prevent double taxation)

On every employed person/self employed: Because they add value to society by their work. (Criminals also included because it is due to them that the law enforcers have value) Effectively, the ‘profession tax’ now confined to Maharashtra will be all India.

And finally

On every parent: Who put values and culture in their child to add value as a member of society.

Politicians will be spared: Not because of being in position but because, what value do they create?