With citizens of India speeding up demands for information on alleged black money deposited in Swiss banks, the Government of India is in a serious need to take some actions to bring back the money from these banks.
While the Government is busy digging for 1000 tons of gold on the basis of some information, it is better to find out appropriate measures to grab India’s black money whose worth is certainly more than the 1000 tons of gold.
Switzerland has been facing strong global pressure to assist overseas authorities in sharing information regarding accounts that are being operated in Swiss banks and have been misused by various persons from across the word for a long time for avoiding taxes in their respective jurisdictions.
Collapsing under the international pressure, Switzerland has agreed upon the proposal of Automatic Exchange of Information (AEOI) and has signed OECD’s (Organization for Economic Cooperation and Development) Multilateral Convention on Mutual Administrative Assistance in Tax Matters.
The convention, which has been signed by India in addition to 57 other countries, allows for the sharing of information and cooperation among its signatories.
As per recent financial figures released by Swiss National Bank, overall funds held by Indian citizens in Swiss Banks falls to a level of 1.42 billion Swiss francs from nearly 2.18 billion Swiss francs a couple of years ago in 2012. The banks anticipate for the situation to become stable over a period of time with an effective improvement in asset management in Switzerland.
Automatic Exchange of Information is expected to help a lot in bringing back the money from Swiss Banks. It would allow collection of bank information on non-resident, passing it on to the countries of these taxpayers in order to impede them from hiding the money on offshore accounts. This new standard of exchange of information, which is expected to be confirmed in September this year, will allow the exchange of information on bank interests, bank account balances, dividends, other financial proceeds and sales income to figure out potential capital gains.
The European country has proposed new rules for fighting illicit money and commanding extra meticulousness by the banks prior to accepting money from clients.
However, Switzerland’s Federal Department of Finance has also clarified on not entertaining any bank information requests that are associated with stolen or illegally acquired account details, in addition to denial of consideration of any fishing voyage from Swiss Bank details.
Although, the Government of India is taking efforts, writing letters to Swiss counterparts, asking for maximum possible cooperation from their side, just getting an insight into the amount of black money and relying on Exchange of Information (EOI) would not be enough to bring back India’s black money from Swiss Banks.
A lot more than this is required on the part of Indian Government to achieve expected results.
If the Indian Government takes serious actions and proposes effective new laws against illegal wealth in Swiss Banks, citizens of India are more likely to witness positive results. Black money worth $1,456 BILLION is a huge amount and is sufficient enough to eliminate serious problems from India, including poverty, illiteracy, corruption, which are interrupting the growth and development of the country.
As Switzerland is blamed of offering safe paradise to illegal wealth from different countries of the world and even the secrecy laws are imposing difficulty in accessing the details of such accounts, Government of India must find out other feasible measures to fight illicit finance and bring back the money from Swiss Banks.