BackIndia pushes for automatic exchange of information on black money
Under the common reporting standards, countries obtain financial information from their local financial institutions and automatically exchange this with other countries
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Lima: India has pushed for flow of information under common reporting standards on a fully reciprocal basis by countries across the world to facilitate automatic exchange of information. Under these standards, countries obtain financial information from their local financial institutions and automatically exchange this with other countries.
India is counting on such an exchange to get information about tax evaders who have stashed unaccounted wealth in overseas countries.
In an intervention made by finance minister Arun Jaitley at the Annual Commonwealth Finance Ministers Meeting at Lima, Peru, he said that there is a “need to ensure that the Common Reporting Standards on Automatic Exchange of Information are implemented globally on a fully reciprocal basis as this would be a key to prevent international tax evasion and avoidance".
India had signed a multilateral agreement on 3 June this year to automatically exchange information based on Article 6 of the Convention on Mutual Administrative Assistance in Tax Matters under the Common Reporting Standard.
These standards, developed under the aegis of the Organisation for Economic Co-operation and Development, are expected to come into effect in stages beginning 1 January, with the automatic exchange of information beginning from 2017. Many of the tax havens have also committed to become a part of this automatic exchange, thus moving towards an era where banking secrecy is expected to come to an end.
Jaitley pointed out that India has been the beneficiary of these systems by getting vital information on tax evasion, and emphasized the need for genuine and equitable multilateralism in deciding global norms and standards on taxation.
India has enacted a stringent black money law to bring to task tax evaders who have unaccounted income and assets overseas. Some of its provisions include tax and penalty up to 120% of the value of the asset as well as prosecution that can lead to up to 10 years of jail term.
The Indian government, hopeful of even some retrospective information under this, has warned tax evaders repeatedly to come clean.
Remya Nair is in Lima, Peru, on the invitation of IMF as a part of its journalism fellowship programme.
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