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| PM for scrutiny of tax havens |
| BS Reporters / New Delhi Apr 03, 2009, 00:53 IST |
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...but India yet to demand details of money kept by Indians in Swiss banks.
 Prime Minister Manmohan Singh said India is in favour of sharing tax information and monitoring tax havens more closely.
“We should endorse sharing information and bringing tax havens and non-cooperating jurisdictions under closer scrutiny,” Singh said on Wednesday at a dinner hosted by British Prime Minister Gordon Brown in London, ahead of the G20 meeting.
Singh's statement gains significance after the opposition Bharatiya Janata Party (BJP) prime ministerial candidate L K Advani recently accused the government of not doing enough to bring back money laundered from India and kept in Swiss bank account.
Leaders of G20, a group of 20 countries that are meeting in London to find ways of derisking the global financial system, are expected to tackle this issue since tax havens are accused of encouraging tax evasion. Many countries have signed tax sharing information with such tax havens that allowed a waiver of secrecy clauses for specific cases.
In the run-up to G20, countries like Switzerland, which had long held secrecy laws that protected the identity of account holders, have expressed their willingness to share information with US tax authorities.
Opposition parties had wanted the Indian government to take similar steps. India, according to a senior finance ministry official, is yet to make formal requests to Switzerland to obtain details of money kept by Indian account holders. Earlier, the government had written to the German authorities, which was pursuing tax evasion cases against its citizens who held money in a Liechtenstein-based bank, seeking information on whether they had details of Indian account holders.
“The reported agreement between US and Swiss banks would not apply to India. We need to negotiate (with Switzerland) separately,” said Anupama Jha, executive director of Transparency International India, which had earlier filed a Right to Information (RTI) with the government of India to seek details of Indian account-holders in Liechtenstein, a small European country known for hosting banks that provide secrecy for account holders.
The finance ministry had earlier said it had written to the German authorities and maintained that India was yet to receive any information on Indian account holders.
The Organisation for Economic Co-operation and Development (OECD) estimates there are 35 jurisdictions classified as tax havens of which three — Andorra, Monaco and Liechtenstein — are listed as unco-operative tax havens.
A tax haven is characterised as a country in which the tax rate is zero or close to zero, and which encourages non-residents to escape tax. According to OECD, the value of assets held in such locations is between $1.7 trillion and $11.5 trillion.
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