G20 summit: G20 endorses India's stance on black money
Brisbane (Nov. 16, 20114): In a major gain for India, the G20 summit on Sunday endorsed the government's line on the need for transparency and disclosure of tax information as Prime Minister Modi voiced support for a new global standard on automatic exchange to tackle the black money issue.
Raising the pitch on the black money issue, Modi in his intervention 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 be instrumental in getting information relating to unaccounted money hoarded abroad and enable its eventual repatriation, Modi said, utilising the forum of G20, which accounts for 85% of world's GDP. 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. The prime minister while flagging his concern over cross border tax avoidance and evasion also noted that increased mobility of capital and technology have created new opportunities for avoiding tax and profit sharing. The Prime Minister 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 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 commonly 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.
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 community to take coordinated decisions although each country has its domestic priority. Briefing reporters, Railways Minister Suresh Prabhu and External Affairs Ministry Spokesperson Syed Akbaruddin said the reference to transparency, which was not there in the draft communique, was incorporated in the final communique after Prime Minister's strong intervention at Sunday's plenary session.