WEF: Jaitley vows to thwart black money menace

Davos:  Finance Minister Arun Jaitley on Thursday said the global community was moving towards automatic exchange of information to prevent black money menace in the future.

“Switzerland has decided to become an early bird to join that grouping. There were some issues related to India due to the Supreme Court. Now I think that has been resolved and we are also moving in the direction of joining that group.”

“Once both of us join that group, then we are supposed to join in a bilateral agreement with regard to automatic exchange of tax information. Once we do such bilaterals with various countries, I think that would be the long term solution to check this menace,” the finance minister said.

Earlier the concept was that people stashed money in Swiss banks but nobody was able to break into that system, Jaitley said.

Switzerland has been evolving its position all these years and therefore they have started cooperating with various states, he added.

The statement came in the wake of controversial black money probe. Jaitley said India had independent evidence of Indians having black money in Swiss accounts.

The Narendra Modi government, which set up a special investigation team to probe black money on its first day in office, is giving high priority to tackling unaccounted money and tax evasion through non-intrusive methods. The focus has thus shifted toward getting and using information received from different countries effectively through the use of information technology.

The amount of Indian money parked in Swiss banks rose by more than 40% to Rs 14,000 crore at the end of 2013 from Rs 9,000 crore at the end of 2012, according to Swiss central bank estimates.

India itself tracks a number of high-value transactions including investments in mutual funds, property, jewellery purchases and overseas travel though annual information returns as also other means.

In October last year, both countries had inked a joint statement of understanding with regard to cooperation on tax matters. However, Switzerland had a clear position that information based on stolen data would not be shared with another country but such requests would be looked into in case of independent evidence on the same being made available.

The finance minister was talking to his Swiss counterpart Eveline Widmer-Schlumpf on the sidelines of the World Economic Forum (WEF) meet and Switzerland promised expeditious sharing of information in this regard.

Jaitley said Switzerland has agreed to share information expeditiously on black money cases where independent evidence is furnished and said that automatic exchange of details would help in curbing the menace of illicit funds.

He said both of them discussed about the parameters based on which Switzerland can provide details on unaccounted money parked in Swiss bank accounts once independent evidence is furnished.

“The Swiss have a clear position that we will not give you any information on the basis of stolen data… If you come with stolen data, we will not cooperate. Our position now is that in case, that is an alternate position and not a preferred position,” Jaitley said.

“We are eager to give you independent evidence, independent of the fact that names of these people figure in a stolen list. Now on the basis of this independent evidence will you give us information that is what we asked Switzerland. So they agreed on October 15 that they will give it and they will do it expeditiously,” Jaitley said.

“These were the subjects that I discussed with them (Swiss delegation). The Swiss minister also discussed the issue of economic cooperation,” he said.

Jaitely, during a meet at the World Economic Forum on Thursday, said India wanted a greater understanding from the US on regional issues, even as the relationship was progressing.

He also spoke of India’s aim for a non-adversarial tax system which would make doing business in the country easier.

He stressed on the issue that India has a roadmap to cut down fiscal deficit to below 3% of GDP in next few years. “India’s potential growth is 9% or more per year; see India’s economic growth significantly better next year,” he said.

Jaitley had a hectic schedule and held meetings with his counterpart from Brazil Joaquim Levy, among others.

With Levy, he discussed issues related to the BRICS grouping. Other countries in the bloc are China, Russia and South Africa.

Among others, the finance minister met top officials of Cisco, Microsoft and Lloyds, which discussed the insurance sector related issues. 

(With inputs from PTI)