India seeks global consensus to check tax evasion

India Saturday sought a global consensus to check tax evasion and illicit cross-border flows by exchange of information among countries, including bank data relating to past transactions.

Announcing a contribution of Euro 3,20,000 for a Global Forum to monitor effectiveness of tax avoidance and exchange information treaties, India's Finance Minister Pranab Mukherjee said here, "tax evasion and illicit flows have posed serious challenges to the world economy and the efforts of the countries to raise revenue for development."

Addressing a G-20 meeting of finance ministers of world's most influencial economies, he said, in last two years more than 700 Double Taxation Avoidance Agreements (DTAAs) and Tax Information Exchange Agreements (TIEAs) have been signed.

For these instruments to be effective, it is essential to reach a global consensus on sharing of past information, relating to tax evasion, he said.

This should include banking data so that past cases of tax evasion can be properly investigated, he said. "This is essential if the spirit of the statement -- The era of bank secrecy is over -- is respected," Mukherjee said.

The UPA government in India is under pressure from political parties, civil society and courts to act against tax evasion and black money.

India has signed or revised DTAAs and TIEAs with 56 countries including Switzerland and sovereign jurisdictions. But, it finds difficulty in accessing information relating to past transactions.

Mukherjee said Auotmatic Exchage of Information among countries is one of the most effective ways to improve voluntary tax compliance and decrease evasion.