Uncovering Swiss stash: India may rope in G-20 to endorse its black money drive

NEW DELHI: India will try and rally the G-20 in its drive to unearth black money salted away by its citizens in Switzerland and other tax havens by pushing for the inclusion of a provision related to this on retrospective sharing of information. The latter, aimed at tackling tax avoidance and evasion, will be based on the new global information sharing format prepared by the Organisation for Economic Co-operation and Development or OECD.

Finance ministers of G-20 will meet later this week in Australia where they will endorse the information-sharing proposal. India’s attempts to seek information from Switzerland, which has strict secrecy laws, on the black money purportedly stashed in its banks have run into a dead end.

Switzerland has said the information sharing pact it has with India became effective from 2011 and it will not provide any information about accounts before that date. India will be represented by minister of state for finance Nirmala Sitharaman at the G-20.

"We have made huge progress with regard to information sharing... We want this to become more meaningful and for that it's important that countries share data on bank accounts with retrospective basis," said a finance ministry official, adding India will try and rally the G-20 on the issue.

Illegal Indian money said to be in Swiss banks has long been a political issue and the new government does not want to ease up on efforts to chase the funds down, particularly with the courts also taking an interest. India entered into a new treaty with Switzerland that came into effect in November 2011, providing for sharing of information on bank accounts.

The Swiss National Bank has reported on its website that the total deposit of Indians increased to about Rs 14,100 crore at the end of 2013 from about Rs 8,547 crore a year ago. Apart from refusing to share information prior to 2011, it has cited domestic laws to stonewall queries from India on bank account holders.

Frustrated by this, India had raised the issue of information sharing on tax offenders at the G-20 earlier as well, arguing that countries and tax havens were citing these provisions as an excuse.

"You need information on bank accounts prior to the agreement becoming effective... Sometimes tax offenders close one account and shift to another jurisdiction," said the official cited above. "For effective and meaning full exchange of information this is important." The official said a global agreement would be more effective in making countries reluctant to share information come on board.