India will support the proposed international automatic exchange of tax and banking information that is expected to aid unearthing and retrieving black money stashed offshore.
Forty-six countries, including India, have agreed to set rolling by 2017 the automatic exchange of information on tax evaders. This would be the key to prevent international tax evasion and avoidance and would be instrumental in getting information about unaccounted money stashed abroad and ultimately bringing it back, Minister of State for Finance Nirmala Sitharaman said at the meeting of G-20 Finance Ministers in Cairns, Australia.
At present, countries exchange information on the basis of requests and that too only on suspected tax evasion and other financial crimes. The proposed global standard would facilitate a systematic and periodic transmission of bulk taxpayer information by the source country of income to the country of residence of the taxpayer. Ms. Sitharaman called for all countries to amend their domestic laws to be able to exchange same level of information with other countries on a reciprocal basis. The implementation of these standards by developing countries could also improve domestic tax compliance as substantial amount of data received from financial institutions by the tax administration could be used for domestic tax purposes also, she said.
