India joins G20 in fight against tax evasion, terror financing

WASHINGTON: Joining the G20 leadership in fighting money laundering, tax evasion and terror financing, India’s Finance Minister Arun Jaitley has stressed on the need for tax havens to become transparent and share information. At a meeting of G20 finance ministers and central bank governors in Washington, attended by Mr Jaitley and Reserve Bank of India Governor Raghuram Rajan, a joint communique was issued which warned non-cooperative jurisdictions with “defensive” steps.  “Defensive measures will be considered by G20 against non-cooperative jurisdictions if progress as assessed by the Global Forum is not made,” the communiqué said. The G20 emphasised on the importance of improving transparency in the global financial system to prevent the misuse by entities for illegal acts such as corruption, tax evasion, terror financing and money laundering.  The statement focused on the need for countries to become members of the Financial Action Task Force on Money Laundering that was established at the G7 Summit in Paris in 1989. India is a member of this initiative. The summit was held on the margins of the World Bank-International Monetary Fund Spring Meetings on April 15. The G20 put the onus on countries that have not committed to an automatic exchange of information by 2017 or 2018 to do so without delaying further.  While India does not have any official estimate about the amount of black money stashed away by its citizens in offshore tax havens, unofficial estimate puts it somewhere between $466 billion and $1.4 trillion. During Mr Jaitley’s interaction with US Treasury Secretary Jacob J. Lew, India and the US had agreed to step up their joint work in pursuing tax evaders and terror financing through steps such as joint tax audits and examination. “We have enhanced our cooperation in tackling money laundering and combating the financing of terrorism through increased information sharing and cooperation, including a dialogue held recently in India,” the two leaders had said in a joint statement. “We both agree on the importance of fighting illicit finance in all forms as an important means of tackling global terrorism,” they added.