India to join new convention to fight black money

India to join new convention to fight black money

"Tax evasion and illicit flows are serious problem and over the last two years, in order to check this trend, India has negotiated 19 new double taxation avoidance agreements and 17 new tax information exchange agreements," Economic Affairs Secretary R. Gopalan said here.

"In addition, 22 existing double taxation avoidance agreements have been renegotiated.  All these 58 agreements provide for tax information exchange according to international standard," he added, affirming India's intent to sign the new treaty soon.

The treaty aims at automatic exchange of information among signatory countries so that tax evasion and illicit flows can be detected early. China and Saudi Arabia also said they will join the treaty soon.

Ten countries such as Argentina, Brazil, Germany and Russia, signed the pact Thursday, while six others, including Britain and the US, had joined the convention earlier.
Speaking at the G20 Summit, Prime Minister Manmohan Singh had also  sought the attention of leaders on the issue of illicit money outflows  and tax havens and said this problem must be addressed, and fast.

"Tax evasion and illicit flows have seen the migration of tax bases in developing countries abroad and are serious problems," the prime minister told the 6th G20 Summit here.
"The G-20 should send a strong message to curb such activity," the prime minister said, even as tax investigations were on back in India against 782 people suspected of having stashed away unaccounted wealth in accounts with the HSBC Bank in Geneva.

The government has been under pressure to act against people who have money stashed away in tax havens across the world. It had set up several bodies, including a directorate under Central Board of Direct Taxes, to unravel these secret bank accounts.