Use coercive diplomacy for information on black money: Parliamentary Panel

A Parliamentary panel on Tuesday asked the government to step up diplomatic pressure on smaller nations to elicit information about black money stashed in those countries.

“Legislative framework alone is not enough because tax evaders keep shifting their operations. The government must use diplomatic pressure, particularly on smaller nations, for the eliciting the requisite information,” the Parliamentary Standing Committee on Finance said in its report tabled here.

The committee has also suggested that DTAAs should also be constantly reviewed in the light of inputs received from Income Tax Overseas Units as well as from other enforcement agencies.

India has started re-negotiations the Double Tax Avoidance Agreements (DTAAs) with 75 countries and Tax Information Exchange Agreements (TIEAs) with 22 nations.

Of this, as on date, India has completed negotiations with 53 countries and sovereign jurisdictions. The government so far has inked 16 such treaties (11 DTAAs and 5 TIEAs).

The panel also asked the government to review existing exemptions or incentives policy for corporate sector to improve effective tax yield.

As per the report, the revenue foregone for corporate tax assesses has sharply increased from Rs72,881 crore in 2009-10 to Rs88,263 crore in 2010-11.