SYDNEY: India today pressed for automatic exchange of key financial information and greater cooperation amongG20 nations to effectively address tax problems and protect the integrity of the taxation system.
Participating in the meeting of G20 Finance and Central Bank Deputies here, Economic Affairs Secretary Arvind Mayaram said information sharing should also address tax avoidance and urged the US to introduce reciprocity in its Foreign Accounts Tax Compliance Act to facilitate the exchange of data.
“Automatic exchange of information should not only address tax evasion, it should also address tax avoidance…tax avoidance should be seen as part of the problem,” he said after the meeting.
The automatic exchange of information should also cover aspects other than taxation, such as salaries, pension royalties and dividend, he said.
Mayaram said certain issues were raised about the Base Erosion and Profit Sharing (BEPS) initiative, which seeks to address strategies that exploit gaps in tax rules to make profits disappear for tax purposes or shift profits to places where there is little or no real activity but low taxes.
He said action on BEPS should not take into account only the concerns of developed countries because the elements of their tax-base erosion can be very different for low-income or developing nations.
“They must interact strongly with developing countries like India to take our concerns on board in designing the framework under which base erosion can be arrested. We said that we have issues with regard to transfer pricing, transparency…we need to look at that also,” he said.
Work on BEPS, launched by the Organisation for Economic Co-operation and Development, is supported by the G20.
Mayaram said issues related to international taxation were also raised amid increasing globalisation.
Cooperation in tax administration is critical in the fight against tax avoidance and evasion in protecting the integrity of tax systems, Mayaram said.