India to press for transparency in tax haven functioning: G20
February, 18th 2011
Facing flak at home over black money stashed abroad, India will press for transparency in the functioning of tax havens at the G20 Finance Ministers meeting in Paris on Friday to unearth "ill-gotten" money lying in such sovereign jurisdictions. "There should be transparency. Particularly the tax havens should cooperate with countries to unearth the ill-gotten resources which are being deposited there," Finance Minister Pranab Mukherjee said ahead of the meeting.
The finance ministers of the world's 20 top countries, including India, China, the US, UK and Russia, are meeting here to review the international financial situation and issues like black money, rising energy and food prices.
He said a part of the black money generated through tax evasion is being deposited in foreign banks, particularly in tax havens. The Indian government is taking steps to tackle the menace, he said.
"We are addressing this issue by entering into agreements with them (tax havens)," Mukherjee said.
At present, India has Double Taxation Avoidance Agreements (DTAAs) with 78 countries and has started negotiations with them for making banking information related to taxes available.
There are sovereign jurisdictions which, however, are not sovereign countries, like St Kitts and the British Virgin Islands, among others.
"With them, we are not having DTAA, but we are entering into agreement, which is called exchange of tax information," Mukherjee said, adding that the problem of black money can be addressed only in a legal way.
"Without any legal framework, nobody is going to give information to you," he added.
India has already signed tax information exchange agreements (TIEA) with four jurisdictions -- the British Virgin Islands, Isle of Man, the Bahamas and Bermuda.
The coalition government in India, headed by Prime Minister Manmohan Singh, is facing heat over black money stashed abroad from the Supreme Court, the Opposition and the media.
The government is being blamed for not taking enough action in this regard.