G20 to back Modi’s black money stand
India to support tax transparency moves
In a major gain for India, the G20 summit on Sunday endorsed the need for transparency and disclosure by countries of tax information as Prime Minister Narendra Modi voiced support to the new global standard on automatic exchanges to tackle the black money issue.
Raising the pitch on black money, Mr Modi, intervening at the summit of the Group of 20 industrialised and major emerging economies called for close global coordination to address the challenge posed by it.
The new standard will help to get information about unaccounted money hoarded abroad and enable its eventual repatriation, Mr Modi said, utilising the forum of G20, that accounts for 85 per cent of world’s GDP.
Mr Modi, while voicing India’s support for it, urged every jurisdiction, especially tax havens, to provide information for tax purposes in accordance with treaty obligations.
He also extended India’s backing for all initiatives to facilitate exchange of information and mutual assistance in tax policy and administration. Mr Modi’s remarks at the G20 session come as his government has repeatedly
said that bringing back black money is a priority and it has constituted a special investigative team headed by a former Supreme Court judge to unearth black money.
Unofficial estimates of India’s illegal money stashed abroad range from $ 25 billion to over $ 4 trillion.
The Prime Minister, while flagging his concern over cross- border tax avoidance and evasion, also noted that increased mobility of capital and technology had created new opportunities for avoiding tax and profitsharing. Mr Modi made the remarks at the plenary session on the subject of
“Delivering Global Economic Resilience” on the second and final day of the summit held at the Brisbane Exhibition and Convention Centre.
He also expressed the hope that Base Erosion and Profit Sharing ( BEPS) system would fully address the concerns of developing and developed economies. BEPS is a technical term referring to the effect of tax avoidance strategies used by multinational companies on countries’ tax basis. BEPS is known more com- monly as “transfer pricing”.
This term is used in a project headed by the OECD that is said to be an attempt by the world’s major economies to try to rewrite the rules on corporate taxation to address the widespread perception that the corporations do not pay their fair share of taxes.
Mr Modi also said that increased mobility of capital and technology have created new opportunities for avoiding tax and profit shifting. He underpinned the need for the world com- munity to take coordinated decisions, although each country has its domestic priorities.
Briefing reporters, railway minister Suresh Prabhu, the PM’s “sherpa” for the summit, and MEA spokesman Syed Akbaruddin said the reference to transparency, that was not there in the draft communique, was incorporated in the final communique after Prime Minister Modi’s strong intervention at Sunday’s plenary session.