Indian authorities this week arrested Janardhana Reddy, a former government minister and a billionaire mining magnate from the southern state of Karnataka, on charges of illegal iron-ore mining.
Investigators say they recovered "incriminating documents" - along with US$1 million (Dh3.67m) of cash, 30 kg of gold, a Rolls-Royce Phantom and a helicopter - after raiding his properties in Bellary, a district endowed with rich deposits of iron ore exported around the world.
In a scathing report released in July, N Santosh Hegde, a former supreme court judge who spent more than two years investigating alleged illegal mining in the region, accused Mr Reddy of running a "mafia-like" empire, controlling Bellary like a personal fiefdom, and inventing a nefarious financial system to avoid paying mining royalties to the government - so far resulting in a revenue loss of $3.5 billion to the state exchequer.
Mr Reddy, 44, who is well known for his extravagant lifestyle - he once donated a 400m rupee (Dh31.7m) tiara festooned with diamonds to a Hindu temple - has consistently denied any wrongdoing.
But his arrest, observers say, reflects the Indian government's toughening stance on alleged illegal mining around the country.
Mining scams are cumulatively bigger than last year's $40bn 2G mobile phone spectrum scandal, in which a government minister was accused of selling mobile frequencies at throwaway prices to companies he favoured.
India loses hundreds of millions of dollars every year to rampant plundering of the country's vast mineral wealth.
The flourishing mining industry is worth $34bn a year, according to the latest India Mining Report, a privately published survey.
It is expected to touch $45bn in the next two years.
The country is endowed with 86 minerals, according to the ministry of mining, which in recent years have attracted global mining magnates such as South Korea's Posco and the London-listed Vedanta. India is the world's third-largest producer of coal and bauxite, the fourth-largest producer of iron ore and the fifth-largest producer of manganese. With 8,700 operating mines in the country, minerals form 16 per cent of India's exports, generating employment for more than 1.1 million people. But the government estimates there are 15,000 mines operating across the country without the required approvals and licences.
The state government of Karnataka says that between 2003 and last yearmore than 30 million tonnes of iron ore has been illegally exported from the state, largely out of Bellary. Illegal mining surged largely on account of growing demand for iron ore from China - where prices of the mineral tripled between 2000 and 2008.
A so-called mines and minerals development and regulationbill seeks to set up a task force to take on illegal mineral extraction and transportation. Fifty special fast-track courts are being set up to handle the cases.
business@thenational.ae
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
If you go
The flights
There are various ways of getting to the southern Serengeti in Tanzania from the UAE. The exact route and airstrip depends on your overall trip itinerary and which camp you’re staying at.
Flydubai flies direct from Dubai to Kilimanjaro International Airport from Dh1,350 return, including taxes; this can be followed by a short flight from Kilimanjaro to the Serengeti with Coastal Aviation from about US$700 (Dh2,500) return, including taxes. Kenya Airways, Emirates and Etihad offer flights via Nairobi or Dar es Salaam.
Founders: Abdulmajeed Alsukhan, Turki Bin Zarah and Abdulmohsen Albabtain.
Based: Riyadh
Offices: UAE, Vietnam and Germany
Founded: September, 2020
Number of employees: 70
Sector: FinTech, online payment solutions
Funding to date: $116m in two funding rounds
Investors: Checkout.com, Impact46, Vision Ventures, Wealth Well, Seedra, Khwarizmi, Hala Ventures, Nama Ventures and family offices
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
Sukuk explained
Sukuk are Sharia-compliant financial certificates issued by governments, corporates and other entities. While as an asset class they resemble conventional bonds, there are some significant differences. As interest is prohibited under Sharia, sukuk must contain an underlying transaction, for example a leaseback agreement, and the income that is paid to investors is generated by the underlying asset. Investors must also be prepared to share in both the profits and losses of an enterprise. Nevertheless, sukuk are similar to conventional bonds in that they provide regular payments, and are considered less risky than equities. Most investors would not buy sukuk directly due to high minimum subscriptions, but invest via funds.
