Black money: Swiss ready on tax info, clock ticks
Gautam Chikermane, Hindustan Times
New Delhi, September 21, 2011
On October 7, Swiss ambassador Philippe Welti will write a note to the Indian
government saying that the Alpine nation is ready to ratify the amended double
taxation avoidance treaty and share tax information with India. With that, the
black ball of money will bounce back into India’s political court from
Switzerland.
Once the two governments decide the date of ratification, India can request the
Swiss government for release of bank data, Welti told Hindustan Times at his
Chanakyapuri residence. "We will examine the request formally and if everything
is as per rules, we will share the information."
The India Swiss treaty — that will be enforceable on Indian black money in
Swiss banks after January 1, 2011 — would be different in two ways, he said.
One, it will include tax evasion as well as tax fraud. "Tax fraud is a crime,
but tax evasion could happen to anyone by mistake. We don’t think tax evasion
is a crime," he said.
And two, the information requirements have been reduced. "The Indian government
should give us the bank account number or the name of the person," Welti said.
"The treaties concluded in the past were stricter when many governments found
the information we sought difficult to give."
The BJP pushed for action. "The government should take the fullest advantage of
this new opening," former finance minister Yashwant Sinha told Hindustan Times.
"If the government still does not give the names of the people suspected of tax
evasion and covered under the new dispensation, its motives will be suspect."
But even giving names could be difficult. For instance, the account could be in
the name of a company registered in another country. "There may be cases where
ownership is very complex," Welti said. "But don’t blame Switzerland for it. As
far as we are concerned, the assets must be located in Switzerland and they
must be identifiable."
How does it feel to be a country that is known as a safe haven for black money?
"We are not for protecting the interests of tax evaders," he said. "We are
interested in the rule of law."
Welti dismissed reports about the $1.4 trillion (Rs 6,720,000 crore) of Indian
black money being stashed away in Swiss banks. "This is a ridiculous figure,"
he said. "Take any economic indicator and it will be impossible to go with this
figure. This number could be representing Indian money worldwide, not in
Switzerland alone. As per our estimates, the money owned by Indians in
Switzerland is $2 billion (Rs 9,600 crore)."
"The exchange of information clause is a welcome development and will improve
transparency in financial transactions," said Atul Dhawan, partner, Deloitte
Haskins & Sells.
The treaty has come a long way from the June 2011 meeting of finance minister
Pranab Mukherjee with the Swiss minister of economic affairs Johann N.
Schneider-Ammann, during which Schneider-Ammann had promised an early
ratification of the treaty. With two weeks left, it is time the Indian
government began to make its first list of tax evaders.
