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'Make it criminal to park money abroad illegally'

BS Reporter  |  New Delhi 

As the issue of assumes centre stage in debates, Global Financial Integrity, which pegged the illicit flow of money out of India at $20 billion a year, today said the country should make it criminal offence for companies and individuals involved in

Director also suggested a country-wise break-up of the financial statements of multinational companies would go a long way in stopping illicit flow of money from developing countries.

“Such break-ups will immediately reflect high profits for shell companies set up in tax havens and will force them to shut down,” he said.

During his ongoing visit to India, Baker also met Central Board of Direct Taxes (CBDT) Chairman Prakash Chandra, and suggested making it a criminal offence for anyone involved in taking out money out of India illegally.

Chandra is heading a committee to look into various aspects of curbing and may look at this issue of criminality as well.

Baker also said a greater transparency in domestic and global financial systems, automatic exchange of information between the nations and tackling mispricing issues were crucial for stopping the illicit flow of money.

He said it was important for a country to know its business partners to keep a check on the shell companies set up in tax havens for the purpose of tax evasion.

With reference to India, he said, “It is extremely difficult for India to bring back from abroad and the process will be very gradual.”

First Published: Sat, June 25 2011. 00:59 IST