Information sharing helps countries in Asia add €20 billion in taxes

A report released by the Asia Initiative, a platform set up by the OECD, the Global Forum on Transparency and Exchange of Information for Tax Purposes said that the commitment to tax transparency and exchange of information among the participating countries is increasing. Currently, 17 countries are part of the Asia Initiative.

An official statement from the Asia Initiative on the first day of a two-day meeting in New Delhi, co-chaired by Revenue Secretary Sanjay Malhotra, identified at least €20 billion in additional revenue in terms of taxes, penalties and interest. Has been.

A report titled ‘Tax Transparency in Asia 2023’ released by the group states that tax evasion and other forms of illicit financial flows (IFF) are a global problem that constrains domestic resource mobilisation, undermines the credibility of tax systems. does, and as a result generates significant revenue. loss to governments

Curbing tax evasion and illicit financial flows is therefore critical to achieving the development goals of the 2030 Agenda for Sustainable Development.

India believes that more work needs to be done to increase tax transparency to combat offshore tax evasion. “As the G20 Chair, India is of the view that tax evaders may use avenues to park unaccounted wealth in real estate in foreign jurisdictions and therefore, there is a need to develop an exchange of information framework with respect to real estate. A feasibility study should be done. Property transactions with an emphasis on acquisitions after the cut-off date and above an agreed monetary limit,” said the report quoting Joint Secretary, Central Board of Direct Taxes, Rajesh Kumar Bhoot.

To deal with this issue, authorities are increasingly relying on automatic exchange of information and mutual administrative assistance in tax matters.

Fiscal pressure on national governments following the pandemic is also stemming tax evasion and cross-border flows of illicit funds.

The exchange of information between tax authorities has gained momentum in recent years with various investigations into aggressive tax avoidance by corporations, money laundering, stashing of tax evaded money in offshore jurisdictions and in some cases finding its way Bringing the spotlight on the dangers of making as an investment in the home country.

“Tax transparency has been an important tool to address these serious issues, with tangible effects on domestic resource mobilisation. At the core is regional and global co-operation between tax administrations, which enables the cross-border exchange of relevant information for tax purposes. ensures delivery,” the report said.