India Ranks Third in Eradicating Tax Evasion

Bangalore: The Global Forum on Tax Transparency ranked India among top three countries in fighting tax evaders. "They (global Community) pretend they are bringing transparent and they either lie or they get it wrong because what they are doing is a threat towards real transparency. What is real transparency in this area? Its not to having bank accounts of all citizens make public. We wouldn't like it. I wouldn't like it. What matters is that the tax administration can get the info, assess so that there is no safe place to hide and by releasing all this info publicly, they give good grounds to those who are secretive in keeping the info and refusing to exchange it. So, this is wrong doing. This is bad for transparency, for the fight against tax evasion," Global Forum on Tax Transparency Head, Pascal Saint Amans said while talking to a news channel.

Replying to the question on India’s position in the global forum, Amans said, “Clearly I would rate India among the first three not to say the first one clearly in terms of promoting the standards, in terms of fighting tax evasion and having the international community lining up, India is the first."

Jeffrey Owens, Director of Centre for Tax Policy and Administration told as the agreements between India and Mauritius helps tax evasion, India has to rethink on it.  "Mauritius, where tax system is not business friendly, discourages investment, since you have adapted a tax system very much business friendly, you really don't need to have Mauritius root, you need to go out and re-negotiate the agreement," he said. While addressing the global conference on tax and equality last week, Finance Minister Pranab Mukherjee told there are some challenges as some influence in the tax systems tries to manipulate the system. However, radical changes in this regard has been observed by the G-20 schemes.

Though India is one of the top nation to defend tax evasion, the report titled ‘Illict Financial Flows from Developing Countries: 2000- 2009’- the January 2011 from Global Financial Integrity stated ‘average annual illicit outflows from developing countries averaging $725 billion to $810 billion, per year, over the 2000-2008 time period. Asia accounted for the largest portion of illicit financial flows of 44.4 percent of total illicit flows from the developing world. According to the recent Corruption Perception Index (CPI) by the Transparency International, India slipped into the 95^th position among 183 countries. Last year, India was at 87^th position. CPI is listed analyzing the perception of corruption in the public sector. It has various information sources about corruption for comparing corruption level in different nations.

"Benefits of the tax policies will be eradicated due to tax evasion, and without the international cooperation it is not easy to trim down the percentage of tax evasion in the country," Pranab said. To deal with the tax evasion issues, government had implemented a five-pronged policy, he added.