G20 meeting signals end to Banking secrecy: India matters.

Economic Times: 4 Apr 2009, 1143 hrs IST, M Padmakshan, ET Bureau

MUMBAI: Three major political parties, Communist Party Marxist (CPM), Bhartiya Janata Party (BJP) and Janata Dal (United), have promised to take steps to bring back the large sums of money that have been stashed away by Indians in tax havens.

The Indian government was silent when the international media reported in May last year that it did not use the opportunity offered by Germany to access the list of Indians having accounts in LTG Bank in Liechstentein, a German principality. This is a wellknown tax haven.

Interestingly, other countries like the US, UK, Norway, Canada, Finland , Sweden and Ireland made use of this offer from LTG Bank. Home minister P Chidambaram, who was till recently finance minister, had said the Indian government has been in touch with the German government.

It looks like the issue is slowly developing into a national issue with political overtones. Experts specialising in cross-border taxation point out that when most governments internationally are contemplating ways to bring to book those responsible for siphoning off wealth, it is reasonable to assume that India cannot continue to remain indifferent to such issues any more. The global attention on the huge wealth rusting in tax havens is a fallout of the slowdown in the world economy.

The issue of Indian money in the banks of these tax havens has caught the attention of the political parties when ET’s February 2 edition reported the contents of a letter sent by former chief commissioner of income tax KVM Pai to the Prime Minister’s Office and the Central Board of Direct Taxes (CBDT).

Mr Pai, after analysing the reports that appeared in the international media, apart from reports put out by international banks, estimated that the amount stashed away by Indians into the tax havens was to the extent of $1.47 trillion.