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23 February 2024

India in tax information talks with 65 nations


The Indian government defended itself on Tuesday against criticism that it was failing to prevent hundreds of billions of dollars being squirrelled away in overseas tax havens.

Days after the Supreme Court condemned what it described as the "mind-boggling plunder" of the nation's wealth by tax evaders, Finance Minister Pranab Mukherjee insisted the government was hamstrung by legal restrictions.

Mukherjee said India had completed negotiations on tax information exchange agreements with 10 renowned tax havens -- including Bermuda and the Cayman Islands -- and had initiated similar negotiations with 65 other countries.

"No sovereign country is going to share information unless there is a legal framework in place," he told a news conference.

Estimates for the amount of illicit money deposited secretly in overseas bank accounts by wealthy Indians and corporations range from ê500 billion to ê1.4 trillion.

"But all these estimates are based on unverifiable assumptions and approximations," the minister said, adding that a government committee had been set up to put together a more accurate figure.

The recent criticism of the government came after it filed an affidavit with the Supreme Court restricting information on money deposited by 26 unidentified Indians in a Liechtenstein bank.

Mukherjee said those on the list could not be named as the information had been received "on condition of secrecy."

"If I divulge those secrets, the day after tomorrow the other countries will not give us information," he said.

"The government has nothing to hide," he added.

Mukherjee said steps in the past 18 months had led to the detection of 150 billion rupees (ê3.3 billion) in undisclosed income.

Mukherjee also said he had appointed an experts' group to explore the possibility of offering an amnesty to offenders in an effort to unearth untaxed wealth.

"But there is a strong viewpoint that it (amnesty) comes at the expense of the honest taxpayer and another that it brings revenues to the government," Mukherjee said.

Opposition parties have been quick to pick up on the Supreme Court's outrage over the black money issue, accusing the government of seeking to cover up the scale of the problem.

India's main opposition Bharatiya Janata Party (BJP) attacked Mukherjee for not disclosing the names of offenders.

"There is no commitment to bring back the money or to disclose the names of the account holders as the people of the country wants and it is completely lacking in vision," BJP spokesman Ravi Shankar Prasad told a news conference in New Delhi.