After Switzerland initiated measures to regulate its banks, most of the unaccounted money stashed in Swiss banks is suspected to have been diverted to countries like Mauritius and Singapore.
The Special Investigation Team on black money has taken cognisance of the issue raised by the enforcement agencies.
“Although the Swiss authorities have started cooperating in the investigations into the unaccounted funds parked in Swiss banks, there are reports that a large part of the funds have already been moved out to other countries. The trend started after the United States began exerting pressure on the Swiss agencies to share details of account-holders who were suspected to have evaded tax,” a senior government official said.
It is learnt that agencies engaged in probing black money cases have informed SIT about the findings which suggest that a significant portion of unaccounted money was pulled out from the European nations by account holders and diverted to Singapore.
“Over the years, Singapore has virtually adopted the Swiss model which extends banking secrecy and confidentiality to account holders. The model encouraged foreign investments by offering very low tax rates to individuals and corporations. The offshore bank accounts are not taxed. Also, it is very easy to incorporate a company there,” said another official.
According to Indian government figures, the inflow of Foreign Direct Investment (FDI) from Singapore stood at Rs. 26,246 crore during April-December in the last fiscal.
Mauritius, however, became the largest source of FDI during the period, recording an inflow of Rs. 35,647 crore.
The enforcement agencies suspect that funds earlier stashed in Swiss banks were also transferred out through Mauritius in a bid to bring the money back to India in the form of FDI.
According to sources, several Hong Kong-based firms have also been found to be involved in routing unaccounted money originating from India. “Efforts are being made to amend the Double Tax Avoidance Treaties with several countries to ensure that we get prompt information on suspected black money cases,” said the official.
