A cash-starved global economy and determined political manoeuvring helped start uncover tax havens this year, but so far it is the US that has managed a peek into secret Swiss accounts while India only got as far as round-table meetings to ask for its chance, reports PTI.
The US-Swiss deal giving the Internal Revenue Service access to 4,450 secret accounts came after bitter wrangling that even put their bilateral ties in jeopardy. The deal created cracks in Switzerland's banking secrecy norms.
India too went to Switzerland hoping to chip away any loose concrete in the secrecy vault, but hasn't gone beyond round-table discussions in Geneva.
Tax havens are estimated to hold assets worth $11 trillion—more than twice the value of stimulus measures announced globally to combat the global financial crisis—and united leaders of G-20 countries in the quest to get this money out. In April this year, the leaders pledged to crack down on tax havens.
In India, black money, particularly the amounts stashed away in foreign accounts, became a poll issue with the Bharatiya Janata Party (BJP) and the Left parties estimating that Indians have squirreled away assets worth up to $1.50 trillion in tax havens. However, the government told the Supreme Court, which is hearing a petition on black money, that there were no authentic figures available on this count.
Way back in 1999, a book 'Black Economy in India' by Jawaharlal Nehru University (JNU) Professor Arun Kumar estimated the quantum of black money at Rs4,87,185 crore, which was 40% of gross domestic product (GDP) at that time.
India plans to comprehensively revise tax treaties with as many as 25 nations, including Switzerland and Mauritius, and re-negotiate with 51 others, to trace black money.
With countries beginning to push their case for revealing of account details, the Organisation for Economic Cooperation and Development (OECD), which sets international tax norms, said the efforts against tax havens have seen tremendous progress.
A top OECD official said that so far this year, as many as 280 agreements have been signed between various countries bilaterally for exchange of information, especially those related to tax.
"This in itself shows the progress made by the OECD initiative. There has been tremendous progress (in cracking down on tax havens)," the OECD official told PTI from Paris.
The prominent among those countries which agreed for increased exchange of information with others are Switzerland, Singapore and Hong Kong.
"Last year, most of the offshore financial centres did not exchange tax information even though many had committed to do so. This year, we have seen the completion of hundreds of (bilateral) agreements," the official noted. — Yogesh Sapkale