Indian Prime Minister Narendra Modi raised the issue of black money and tax evasion at the G20 Summit in China on Monday, advocating for member countries to take appropriate actions against financial corruption.
Organisation for Economic Co-operation and Development (OECD), through its world forum that seeks to set international standards for transparency and exchange of information regarding tax and policy tools for inclusive and sustainable growth. On the second day of G20 Summit in China, Indian PM Modi stressed on these values and said that fighting corruption, black money and tax evasion are central to effective financial governance. The world forum has widely discussed the need for preventing base erosion and profit shifting (BEPS), a global practice that refers to misuse of tax laws. The same was acknowledged by Modi.
Among the international standards that the OECD World Forum has laboured to establish is the Automatic exchange of information (AEOI). “We need to act to eliminate safe havens for economic offenders, track down and unconditionally extradite money launderers and break down the web of complex international regulations and excessive banking secrecy that hide the corrupt and their deeds” said Modi, urging other member states to look into the issue.
The G20 member states represent 85 per cent of the world’s GDP. Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the UK, the US and the European Union make the G20. Hence, OECD choosing to tackle the problem of black money at the G20 forum comes with relevance and efforts to fight BEPS and has reportedly seen 39 jurisdictions being added to the 46 existing members.
India Resolute on Curbing Tax Evasion
The Indian government has been taking measures that include policies, increased enforcement action on the ground, legislative and administrative frameworks to deal with the issue of black money, especially funds that are stashed abroad. ‘The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015’ was passed specifically to deal with this issue.
OECD tweeted that statements by Modi and acknowledged that they were in line with the recommendations of 2017-1018 target, which is to ensure that the AEOI standard finds commitment among states which adhere to the council.
— OECD Tax (@OECDtax) 5 September 2016