In another step towards shedding banking secrecy practices, 47 nations including Switzerland and India, have agreed upon automatic exchange of information on tax matters.
The endorsement of the ‘Declaration on Automatic Exchange of Information in Tax Matters’ by 47 countries under the aegis of OECD on Tuesday will come as a boost for India, which is stepping up pressure on Switzerland to share details on alleged illicit funds stashed away by Indians there.
The Organisation for Economic Cooperation and Development (OECD), the global body that frames economic policies and conventions against tax frauds, said the latest declaration commits countries to implement a new single global standard on automatic exchange of information.
The standard agreed upon by the 47 nations will help clamp down on bank secrecy practices and ensure that they work towards full disclosure of information on tax evaders and financial criminals pertaining to any national jurisdiction.
“The declaration on automatic exchange of information in tax matters was endorsed during the OECD’s annual Ministerial Council Meeting in Paris by all 34 member countries along with Argentina, Brazil, China, Colombia, Costa Rica, India, Indonesia, Latvia, Lithuania, Malaysia, Saudi Arabia, Singapore and South Africa,” OECD said in a statement issued last night.
Switzerland, long perceived as a safe haven for stashing away untaxed money, is an OECD member.
“The standard, which was developed at the OECD and endorsed by G20 finance ministers last February, obliges countries and jurisdictions to obtain all financial information from their financial institutions and exchange that information automatically with other jurisdictions on an annual basis,” said the statement.
Such a protocol was required between the countries as tax crimes rob countries of their genuine revenues, OECD said.
“Tax fraud and tax evasion are not victim less crimes. They deprive governments of revenues needed to restore growth and jeopardise citizens trust in the fairness and integrity of the tax system,” OECD Secretary General Angel Gurria said.