Says tax havens pose security risk, hit tax collections.
Finance Minister Pranab Mukherjee expects the economy to grow by over 8 per cent in 2010-11 and has predicted 7.5 per cent growth in the current financial year (2009-10). This is higher than 7.2 per cent growth projected by the Central Statistical Organisation (CSO) for 2009-10.
A projection of 7.5 per cent is marginally lower than the 7.75 per cent projected by the finance ministry in its mid-term review in December.
The Index of Industrial Production (IIP) figures for December 2009 suggest that we may end 2009-10 with a growth rate of 7.5 per cent, and growth in the next year (could be) at over 8 per cent, Mukherjee said at an event organised by the Central Board of Direct Taxes (CBDT) today.
Earlier, in his inaugural address at a seminar on transfer pricing, the finance minister expressed concern over tax havens and held them responsible for augmenting the global economic downturn.
He said the financial manipulations in these areas (tax havens) affected tax collections and were potentially detrimental to security interests.
The opaque system of exchange of information in these tax havens and their non-compliant behaviour are a matter of concern not only for revenue base but also linked to financing of activities which are detrimental to the national security interestsit is also believed that the tax havens and low tax jurisdictions were important actors in the crisis, Mukherjee added.
The finance ministers statements come at a time when India is in the process of revisiting its tax treaties with a number of countries, including tax havens like Switzerland.
Tax havens are countries which have low or zero tax rates and have and transactions within such countries are protected by the law of secrecy. Mukherjee said the role of tax havens and low tax jurisdictions had become an area of great concern in the post-downturn period.