Public interest in getting back the money stashed away illegally in Switzerland and certain other centres by Indians seeking to avoid taxes has never before been so high. While public perceptions have remained strong over the years, the issue continues to defy workable solutions. A major reason is that there is hardly any accurate information about the quantum of money salted away or the identity of the depositors. There are, as of now, vague estimates of the amount kept away — these range from Rs.30 lakh crore to Rs.70 lakh crore. The wide range is an indication of the complete absence of reliable official data. Banks in countries such as Switzerland have for long been wedded to secrecy as far as customer information is concerned. In fact, it is this secrecy along with some other positive features — notably, the extremely stable political and economic environment — that has made these countries most attractive for overseas investors. Adding to the complexity is that not all transactions by Indians with banks in these tax havens need be violative of Indian laws. Over the years, India’s foreign exchange rules have been liberalised substantially. It is possible for many categories of individuals and companies to maintain foreign exchange accounts abroad. Capital transfers are freely allowed up to $200,000 a year.
Indications are that the flow of money to tax havens has increased despite fewer exchange controls and the sharp cuts in personal tax rates. For India, like many other countries, tax evasion by the wealthy poses a threat to public finance. A growing international backlash against tax evasion has prompted many countries including India to take steps to pierce the veil of secrecy. G20 countries have declared their resolve to compel tax havens to adopt international codes of conduct and information-sharing. India will begin its first round of negotiations with the Swiss authorities in December but it is conceded by both sides that getting information from Swiss banks will not be easy. To begin with, the Government of India needs to have a proper bilateral treaty of the type the Swiss government has recently entered into with some 90 countries. In addition, it needs to buttress its case through hard facts and evidence. A recent deal struck between the United States and Switzerland allows the U.S authorities access to 4,450 secret accounts in a leading Swiss bank, UBS. The deal, which was hailed as a blow for fairness in taxation, was won after the U.S authorities could prove that the Swiss bank was complicit in wealthy Americans evading taxes.
Keywords: Secret, foreign, accounts, Swiss banks, tax havens, black money
Comments:
Will the money stashed in Switzerland come out? Data says about several crores of rupees being stashed in Switzerland. The UPA Government should initiate severe action to bring the money back to India and help the needy in the country
Political parties have a lot to gain if they can manage to bring that money back. It can keep them in power for at least 5 more years. You don't need more motivation than this to pursue the case, if you are really worried about the country.
The quantum of illegally accumulated black money, amounting roughly more than Rupees 70 lac crore, transferred to Swiss banks and other safe havens abroad is not only a serious fraud on public exchequer, but a diversion of country's wealth and resources away from productive investment in domestic economy to frozen treasures, maintained to sustain the vulgar consumption by the parasitic idle class of unscrupulous politicians, bureaucrats, despots, criminals and drug mafia, flourishing under, more or less, official patronage. Curiously, if the US could succeed at bringing around the Swiss banks, like the UBS, and the Swiss Government authorities to reveal the identity of 4500 and odd tax evading US' account holders through coesive persuation under special deal, why Indian government, if at all it is serious, could not achieve the same, or is this prerogative reserved only to the super powers? Again, with all the hulla-ballu around the G-20 resolve to choke off all the channels of illegal money flow across the countries, or the strengthening of global financial regulatory regime and the Basel I-II banking norms, what is the action on ground?
We have heard almost all the politial parties protesting against the accumulation of black money in swiss banks at the time of elections.All the News channels were making furore over this issue at that time as if something suddenly happened to them.But nobody cared after elections including news channels.This is the first that anyone has raised this topic again.Thanks to HINDU.If the government is really interested in public welfare and so-called booming economy of india they should take pertinent steps towards retrieving the illegal money accdumulated in switzerland.Hope they do it.
To begin with, the Govt. should ask all the citizens to declare the details of bank & investment accounts held outside India under affirmation. This can be started by an additional disclosure requirement while filing the IT returns.
The political parties have raised this issue during the election for getting vote. The students and the youth have to give pressure to the ruling party to take step against this issue. If the youth congress leader consider this as major issue. Our nations repayables (loans) worth roughly rs: 32 lakh crore can be easily settled. Since our indian citizens black money maintained in foregin banks(mostly in swiss banks) is roughly around rs: 100 lakhs crore which is more than indian govt loan. Since no of indian politicians have maintaining unaccounted money with swiss bank. This issue may not taken into consider for action so every student and youth should insist the govt to take step. There are some reasonable unclaimed amount is with swiss bank that also should be bring to india. The US govt got the list of 4500 USA Citizens having black money a/c with ubs bank(swiss) if they can able to do means why con't we? If the govt fails to fulfill their promisess given during the electiön. Will be remembered during the next election by the people. Every citizen should think on this issue which will create a greater impact. I thank our finance minister for taking steps againt thir issue and media especially "the hindu" the other media also to support to find a solution for this problem. I am proved to be an indian citizen expacting the same from everyone...
in a country like india, where economic disparity is a grassroot level stigma to the society, small positive initiations can change the whole course of these pernicious situations. govt must put forward and take some praiseworthy steps in this event.
The list, if and when made public need not necessarily feature all the names. It would come as no surprise if none of the politicians feature in the list.
Whose names can be expected in the list? Obviously it will be big businessmen, politicians and the uber rich. Now think for a moment, in this illusion of democracy, who are the ones running the show - it the same people or most of them if not all. In such a case, what is the probability that the truth will come out? The corrupt know that they are all in the same boat, so if one blows a hole, he will go down along with the others.
How come these same international banks will are now getting license to do business in India and so recruit more tax dodgers locally for their overseas accounts.
I don't think that money is going to come back. If anyone has money that is stored in Swiss vaults it will be our politicians. Take Karunanidhi's dynasty for example. Why would he allow the UPA to probe into these things when he knows that it will just open up a can of worms for his party and his family? It is not only him but the entire political system that would be caught red faced. Why would anyone do that to themselves?
I do not think so that the swiss bank will declare the amounts correctly even after we provide the list of people we want to investigate. It is all lost money. We need more stringent rules to monitor the transactions which will happen in the future.
Expecting the thieves to return their theft is the most foolish of all to expect. Until the people are oblivious and are shy to show their displeasure and prove that the politicians cannot get away with their loot, the people of India are doomed to be looted and to poverty.
It is a shame that as a nation we are unable to force those in authority to come clean on this Swiss and other foreign bank accounts of those who have betrayed the nation. Various newspapers and news media of repute should take up this earnestly and force a boycott on those in power so that some way is found out. If at all the names come out, those involved should be put in jail straightaway and their Indian properties should be attached. More than any media, the Supreme Court should take suo moto action. We need a mass movement to protest against these plunderers. Any takers ?
-I wonder how can one get an estimate of how much Indian black money is stored in Swiss bank. Can the writer please tell me? I don't think the Swiss govt would ever agree to reveal this info. Because if it does, everyone will try to get their money out of there and the Swiss economy will receive a coupe de grace with that much money going out of country. I can only imagine what kind of economic reactions it will bring. Things like land prices and gold prices will be at skies.
It is unfortunate and misleading that the media and the government agencies euphemistically call the phenomena of money transfers to overseas banks as 'tax evasion' as if the money earned was legitimate in first place. More than about the loss to exchequer on account of unpaid taxes, what should be concerning is that this money was raised illegitimately as graft or leakages in public spending on various government programs or investments. Ideally this money would have benefited the economy by increased quality of assets, production activity, and job creation. The greatest losers here are the tax payers that finance all the public spending. Despite their fair share of taxes they had to contend with lousy public goods and services.
The concept of Switerland as just Tax heaven is almost outdated, new Tax heavens like Mauritius, Caiman Islands are more popular now. Govt should pursue Indian money in banks of these countries too. I guess just taking only of Swiss banks is half part of problem.
What is needed is a political will to unravel the mystery. The present government is totally unwilling to commit itself wholeheartedly in this regard. It is on this issue, the media should exert unrelenting pressure on the central govt. The opposition also should go all out in blocking the budget session of parliament, if it can really succeed in bringing sizeable money through taxation on unaccounted money.There is nothing better our MPs are doing in parliament otherwise. It is a true test of strength and character, for our PM, who boasts of being honest , otherwise. Let him have the courage, to go down in the history, as who really tried in cleansing the govt.