Even as the Government has got “authentic information’’ from nearly 10 countries including Germany and Switzerland on the black money stashed abroad by Indians, the government has set up an electronic centre unit in the Finance Ministry to deal with the unaccounted money issue in India, Brazil and South Africa (IBSA).

This new unit, functioning under the wings of North Block, will deal with these Governments in exchanging information on tax evaders and black money in IBSA nations. “The government has received information from 10 countries on the issue. The information is being disseminated by the various government agencies. Already prosecution has been launched in 17 cases pertaining to LTG bank in Germany. The IBSA electronic centre unit is aimed at tackling this menace in these nations,’’ a senior official said.

This new unit, in close association with the revenue intelligence agencies of other countries, identify and share information on tax evaders, on “abusive tax schemes’’ and the people who are involved in promotion of such activities. Abusive tax schemes are those transactions that are designed to reduce or defer taxation. Officials of the three countries held prolonged talks recently before a decision was taken to set up this tax evasion prevention unit.

The revenue authorities of all the three IBSA countries will also study the latest trends in tax evasion, abuse of taxation laws and the trends that have emerged to avoid taxes. They will also help in tracing black money flow in these countries and get information in a speedy and accurate manner. It would also facilitate sharing of expertise, best practices and experiences in tax administration to combat abusive tax schemes.

At present, Indian has Double Taxation Avoidance Agreements (DTAAs) with Brazil and South Africa. “Representatives of all the countries will have an exchange of information and hold regular meetings in the three countries by rotation to work out a joint strategy on how to tackle this growing menace of stashing funds abroad and prevent ways of tax evasion.

This move comes in view of the increasing pressure on the UPA II government to act on the issue of black money and take strong measures to bring back billions of dollars kept in bank accounts illegally abroad. The opposition parties, civil society and social activists and also Supreme Court have kept up the pressure on the Government on the issue of black money. At present, India has revised DTAAs with 40 nations enabling sharing of information on banking and other tax-related information.

In May this year, the government had constituted the panel to look into strengthening of the law to curb black money generation. The committee is likely to submit its report soon. In fact, India is also considering signing the multilateral convention on mutual administration assistance in tax matters, which is backed by the Organisation for Economic Cooperation and Development. This will promote automatic exchange of information and provisions for assistance in tax collection. Currently, there are 20 signatories to the convention.

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