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BW Businessworld

Taking The Lid Off

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With Switzerland agreeing to disclose details of 4,450 Americans holding secret accounts in Swiss bank UBS, it is time for India to press its case for disclosure of black money stashed away by its citizens in Swiss banks.

The relentless pursuit of the case by US's Internal Revenue Service seeking details of 52,000 accounts worth $18 billion has emboldened other nations and dented tax evaders' faith in Swiss banks.

Switzerland still swears by its banking secrecy laws but that is being seen as nothing more than bravado. "UBS is the turning point," says Wil- bert Kannekens, head of KPMG's global international corporate tax group."The world has changed."

Before UBS discloses, more than 400 US nationals have availed of the amnesty scheme and declared their wealth in July — against just 100 in 2008. Fortunately, as India and other nations try to shore up their tax revenues in the aftermath of the global recession, the wind is blowing towards greater transparency.

In July 2008, the G8 heads of state urged all countries to implement the Organisation for Economic Cooperation and Development (OECD) standards of transpare- ncy, cooperation and disclosures. In April 2009, the OECD outlined three tiers: a ‘white list' of those who have implemented information sharing agreements, a ‘grey list' of those who have pledged they will share information, and a ‘black list' of jurisdictions avoiding sharing tax information. Costa Rica, Malaysia, Philippines and Uruguay recently moved to the grey list.

For India, it is better to strike when the iron is hot.

(This story was published in Businessworld Issue Dated 31-08-2009)

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