JOIN US
I
t is not surprising that Swiss bank authorities have refused to part with any information on individual accounts held by Indians. The banks had always sworn by their secrecy laws to protect such information. While Indian request has been stonewalled, there were earlier reports of an agreement between the US government and the Swiss by which details of about 4,500 accounts held by Americans in these banks were handed over to the US Internal Revenue Service. The German government was also successful in extracting information about illegal accounts held by its citizens in Swiss banks. India does not have the financial clout of the US or Germany to force the Swiss banks to heed its request. But there is also the question whether we did proper homework before making the request. The request had to be supported by evidence of wrong-doing, like tax evasion or other illegalities, in individual cases. The Swiss authorities have said that they are ready to consider such cases in which criminal complaints have been filed and the request is made through official channels.
Finance Minister Pranab Mukherjee has said he would talk to the Swiss banks on the matter. He had made a similar promise in parliament last month. The commitment and sincerity of authorities in pursuing the Swiss trails have always been in doubt. According to reports, Indians are the single largest national group which holds the highest amount of money in Swiss banks. It is estimated to be about $1500 billion.
The stashing of wealth abroad and the growth of black money inside the country pose a serious threat to the economy. According to the Annual Information Return filed last year 30 per cent of high-value transactions were effected without a Permanent Account Number (PAN), though the use of PAN is mandatory. That is an indication of the possible size and growth of the parallel economy created through tax evasion.
The government should make serious efforts to pursue the illegal Swiss bank accounts and stop the large-scale tax evasion in the country. India was planning to renegotiate its tax treaty with Switzerland to facilitate disclosure of information by Swiss banks.
But even a new treaty may not help unless specific cases of illegalities, supported by evidence, are presented to the Swiss authorities. The government should summon the will for that.