BRICS economies must shape global tax rules for next generation, says FM Sitharaman

Finance Minister Nirmala Sitharaman on Wednesday said decisions taken in ongoing multilateral tax negotiations over the next few years would shape cross-border taxation for a generation, stressing that BRICS economies must ensure their perspectives are reflected in the emerging global tax framework.

Addressing the BRICS Tax Heads Meeting in New Delhi, Sitharaman said the rules of international taxation were being renegotiated through several multilateral processes, including the UN Framework Convention on International Tax Cooperation.

"The decisions made in these processes over the next few years will shape cross-border taxation for a generation," she said.


Sitharaman said BRICS economies, as source jurisdictions and large developing economies that have built significant domestic tax capacity from a low base, had an important perspective to bring to these negotiations.

"BRICS economies as source jurisdictions, as large developing economies, as countries that have built significant domestic tax capacity from a low base have a perspective on those negotiations and that is essential to their fairness and their durability," she said.

The Finance Minister said the cooperation among BRICS tax administrations was aimed at creating institutions and tools that would continue beyond India's current chairship.

"These working groups exist because every country in this room has experienced these problems. They create the sustained institutional space in which progress on them becomes possible. Not in one year, but over time, regardless of who holds the chair," she said.

Sitharaman said the new working groups on international taxation and transfer pricing, and revenue statistics, were intended to address common challenges faced by member countries.

She also highlighted India's experience in using technology in tax administration, including faceless assessment, pre-filled returns, real-time invoice authentication and AI-enabled taxpayer assistance.

"Technology, the use of data and digital infrastructure to make tax administration more precise, more accessible, and less dependent on the discretionary powers of individuals," she said, identifying one of the key themes emerging from BRICS tax cooperation.

Sitharaman said the BRICS tax collaboration tool, tax knowledge hub and cross-learning lab were being developed as practical instruments rather than merely policy initiatives.

"The tax collaboration tool, the tax knowledge hub, the cross-learning lab, each of these is a working instrument produced by sustained effort across our working groups," she said.

Revenue Secretary Arvind Shrivastava said the proposed International Taxation and Transfer Pricing Working Group would create a permanent BRICS platform for sharing experience on treaty interpretation, transfer pricing audits and other tax mechanisms.

"The International Taxation and Transfer Pricing Working Group creates a permanent BRICS platform for sharing experience," Shrivastava said, adding that in multilateral tax negotiations, "our collective voice is needed and currently insufficient".

(With inputs from agencies)