India has decided to press for removal of a distinction between tax evasion and tax fraud which has helped Indians conceal their income in tax havens abroad. Pranab Mukherjee This is part of India’s drive to get back the monies abroad. Sources said a number of countries have refused to give information on the ground that tax evasion was not an offence under their law but if tax fraud was included, they would cooperate.
The point was forcefully made at G-20 meeting of finance ministers and central bank governors in Paris last week end.
Pointing out that different definitions of expressions like “tax evasion” and “tax frauds” leads to problems, Mukherjee said there was a need to harmonise these, so that countries could exchange information without any hindrance.”Some countries/jurisdictions differentiate between tax fraud and tax evasion. This difference in perception assists deliberate concealment of wealth for the purpose of evading tax, something regarded as crime all over the world, and impedes effective exchange of information.
“We should encourage countries to remove this distinction in order to help efforts of government authorities in pursuing tax cheats who have parked funds outside the country,” he said in his address at the ministerial meeting at the G-20.
The minister said India was in the process of revising its Double Taxation Avoidance Agreement (DTAA) with all the 78 countries which whom it had signed there.
“Revision of DTAA with 10 countries have been completed and many more are in the offing,” he said. Revised DTAA will help in seeking banking information about the offenders.
He also raised the issue of ill-gotten money stashed abroad during his bilateral meetings with French Finance Minister Christine Lagarde and his German counterpart, Wolfgang Schauble. Mukherjee said about 500 tax information exchange agreements have been signed between different countries across the world, a development that would help in fighting the menace of tax evasion and track ill-gotten money.
Kudos to our Finance Minister; a doubt comes has he taken the permission from the Ring Masters of Congress party to say so. If the intentions true and honest why not make such law in the country to put some high end tax evaders behind the bars; probably Prnab da is worried he may have additional space in the Jails to accommodate the modern tax offenders.
In fact Pranab da should remember many customs, excise and FEMA violations have been made compoundable which emboldened our business men more confident to evade taxes. Within the country we brush aside the real frauds. Let Pranab da set his house in order, before speaks up before the international forums.
It is nice to see Pranab da talking to others on this issue. Let him first make necessary amendments in the tax laws of India, which then others can follow. Lead by example. Don’t wait for consensus. This amendment can even be made retrospectively.