India has now got international amalgamation in its wrestle against black money. Countries like Germany, France, Switzerland, Singapore, Mauritius and the British Virgin Islands are providing information, or will soon start doing so, on assets held by Indians, assistinging the Modi government in its campaign to crack down on unaccounted wealth.
A finance ministry official said, “We are able to pierce through multiple layers… as a number of tax jurisdictions are now helping with data flow.” The freer exchange of financial information, thanks to agreements such as the Foreign Account Tax Compliance Act (Fatca) with the US, will aid recognise tax evaders who didn’t come clean during the grace period that closed on September 30.
Datas are passed on by Singapore, which has strong business links with India. Access wil soon be supplied by Mauritius, which has signed a global information-sharing protocol. Active assistance is being provided by France to help India dig deeper into data on the HSBC accounts it had provided earlier.
As stated by the government that it will follow offenders after the onetime compliance window closed. On Monday, The finance ministry, reassessed total declarations to Rs 4,147 crore from Rs 3,770 estimated earlier, though the number of cases remained the same at 638.
After names of account holders in Lichtenstein Bank that it had handed over to the government were made public, Germany had stopped sharing information. But it has resumed the supply of such data. In order to have a more durable information sharing arrangement, both countries are renegotiating their tax treaty. “We are getting a good response” from the British Virgin Islands, said the official. All this started after an Indian delegation visited the country in January.
Switzerland is a popular destination for black money due to the complex structures that its financial firms specialise in. Switzerland is bringing change in its laws to allow inquiries into stolen data as well, making possible investigations in matters where the government may have received the information through non-official channels.
Ask companies to identify their real owners
Along with the fruitful information-sharing, the ability of Indians to hide their assets overseas will vanish quickly. Sure, diplomacy helps. But just like the US, India should negotiate with tax havens better, to secure even past information. M ost countries will automatically exchange information on tax-evaders, from 2017. This will make it easier for India to establish audit trails on complicated deals. However, the government should also mandate companies to recognise their real owners and make the registry public. We must pull out all the stops to fight black money.