On the first day of implementation of the goods and services tax, on Saturday, Prime Minister Narendra Modi led a group of accountants. While showing the praise on them, Modi asked the accountants to advise their clients against collecting or concealing black money.
Citing his government’s efforts to combat unaccounted wealth, Modi said the money deposited by the Indians in Swiss bank accounts was almost half by the end of 2016 compared to the previous year.
“The new laws were made and age has been strengthened. New agreements were signed with countries and precedents have been renewed. Proof of the government’s efforts to curb black money abroad is in the past recordings of the Swiss bank Which show that the money deposited by the Indians reached its lowest level ever. ”
Data published by the Swiss Central Bank, the Swiss National Bank show that the money deposited by Indians in the country’s banks fell to 4482 harvests in 2016, from $ 1,135 in 2015. However, this decline N is not new.
The Swiss central bank provides annual information on funds deposited in bank accounts in the country since 1987 and data for each continent and country are available on its website.
Data show that 2016 was the third consecutive year in which money held by the Indians in bank accounts in Switzerland refused. The data only until June this year, so recent measures such as the elimination of high-value banknotes or demonetization November 8 and the Ministry’s efforts of income tax for information on hidden black money abroad Can be credited as contributing factors.
More plausibly, an international effort to increase transparency in financial transactions, which began before the Modi government came to power, appears to have had an impact.
The fall of Indian black money hidden in Swiss bank accounts was first observed in 2014, after more than 50 countries signed a statement prepared by the Organization for Cooperation and Development in May this year. The declaration required automatic exchange of tax information as a measure to curb tax evasion abroad.
The OECD defines the automatic exchange of information as bulk “systematic and periodic transmission of information” of the taxpayers by the country of origin to the country of residence of the account holder.
“The advantage of automatic exchange is that India will automatically receive information about its residents without having to make a specific request and without having first identified cases of noncompliance,” said Monica Bhatia, head of the OECD Global Forum on Transparency and Exchange of Information for tax purposes, Scroll.in said.
“This is expected to have a significant deterrent effect on taxpayers seeking to conceal money overseas and assist law enforcement efforts with tax authorities.”
The actual exchange of information has not yet begun. Although some of the signatories have committed to begin sharing this information for transactions beginning in 2017, others begin reporting in 2018. However, it is likely that the dissuasive effect began.