Baba Remdev – a yoga guru – is a national celebrity in India. Every day his television show is watched by millions. He is also no stranger to hunger protests which he uses to spotlight his concerns about India’s problems with corruption and the reported $500bn in ‘black money’ illegal stashed in foreign tax havens.
The Yogi’s concern is not only well-founded but shared by the country’s President who last year tried to pilot an anti-corruption bill through the Parliament only to have its consideration scuppered when the Upper House was forced to adjourn because of chaos amongst its members.
Remdev has advised Prime Minister Singh that ‘personal honesty’ is not enough and he must ensure the collective honesty of his Cabinet Ministers as well. This, against the backdrop of reports that Singh’s government has refused to investigate allegations of corruption against fourteen Ministers.
The Yogi has staged hunger strikes before and was forcibly removed from New Delhi last year during a 9-day anti-corruption protest. In fact, he announced plans for his next hunger strike even as he was in the midst of another with fellow anti-corruption campaigner Anna Hazare.
His proposed action to force the government to deal with this matter of national concern falls on the heels of a White Paper on money Laundering and Tax Evasion prepared by India’s Central Board of Direct Taxes, setting out the government’s response to the problem of tax evaders with offshore accounts filled with the so-called ‘black money’.
In addition to ‘optimizing’ tax rates and the creation of a plethora of new national institutions to tackle tax evasion, the White paper – issued last month – also sets out what India will do at the international level to deal with the trafficking of illicit money.
Interestingly the Paper credits India with successfully putting the negotiation of Tax Information Exchange Agreements (TIEAs) at the top of the global agenda during the 210 Seoul Summit of the G-20. It also sets out the case for the worldwide adoption of automatic exchange of tax information, on a ‘voluntary basis;’ and global adoption of the OECD Multilateral Agreement on Mutual Administrative Assistance in the Collection of Taxes.
The Central Board goes on to illustrate its involvement with the OECD Global Forum and points out that India is the Vice Chair of the Per Review Group of the OECD Global Forum (GF) responsible for the Phase I and II Assessments of GF’s members which tests adherence to international transparency and tax information exchange standards.
India’s comprehensive exposition on ‘black money’ is not only instructive because of the detail it provides on the mechanics of shifting money but also because of the list of solutions which India thinks should be adopted at the global level to help the country recoup its multi-billion dollar tax loss.
Given that India has taken over the helm of the OECD Global Forum relinquished this year by the French national, who is now the Director of the OECD Centre for Tax Policy, the White Paper provides useful points about what lies ahead for ‘onshore’ and ‘offshore’ financial centres.