A coalition of non-government organisations (NGOs), working for financial transparency, has called India to strongly raise the issue of cross-border exchange of financial information on black money at the upcoming G-20 summit at Brisbane in Australia during the weekend.
The Financial Transparency Coalition also asked the the country to pitch for country-by-country reporting for multi-national corporations.
“Prime Minister Narendra Modi has made bringing black money home a national priority. Now, it’s time for India to do the same on the global stage,” the coalition said in a statement here.
Modi had also highlighted the importance of the issue of black money at the Summit in his pre-departure statement. The demand from the organisation came at a time when India itself failed to sign an automatic exchange of information signed by some 50 countries in the Organisation for Economic Co-operation and Development (OECD) due to uncertainty regarding interpretation of confidentiality clause in tax treaties.
“We’ve seen progress on issues around financial transparency through the OECD, the development of a cross border information exchange system… but it’s not enough to simply create these systems. You must make sure they are implemented correctly and inclusively,” said Pooja Rangaprasad of the Centre for Budget and Governance Accountability (CBGA). CBGA is part of FTC.
It’s estimated that roughly a trillion dollars leaves developing countries annually by way of illicit financial flows-money that’s illegally earned, transferred, or utilised, FTC said. Most of this is money that should be generating economic growth, upping tax revenues, and funding new roads, schools, and hospitals. Instead, this capital is finding its way into bank accounts in tax havens, often inside G20 countries, the statement alleged.
“While the G20 may represent 85 per cent of the global GDP, financial transparency standards adopted in Brisbane cannot forget the world’s poorest countries, whose economies are losing billions to black money each year,” said Porter McConnell, Manager of FTC.
He said the G20 might not provide a proper seat at the table for the world’s poorest, but that doesn’t mean its policies shouldn’t take them into account.