Taxmen fail to get information on offshore money

The income tax (I-T) department has not been able to make any headway in detecting the offshore investments by Indians, including 20 big names from Andhra Pradesh, in the safe havens abroad. The reason? ‘Non-cooperation’ by the foreign counterparts despite agreements for sharing tax information.

It was after the much-publicized leaks about offshore investments and exposure of tax havens in over 170 nations by the Washington-based International Consortium of Investigative Journalists (ICIJ) in April 2013 that the Central Board of Direct Taxes (CBDT) woke up from its slumber. The I-T department, through the foreign tax division of CBDT, sought details the secret accounts of more than 600 Indians in these offshore jurisdictions, including the British Virgin Islands (BVI), Singapore, Samoa, Malaysia, Cook Islands and Taiwan.

However, the governments have not divulged any details so far, leaving the officials here high and dry. This despite the fact that India has inked the Tax Information Exchange Agreements (TIEAs) with many of these tax havens.

Highly placed sources in the Income Tax Directorate said that in AP itself, there are almost 20 high profile businessmen and politicians accused of having offshore investments in the form of secret companies, trusts and concealed tax havens. Officials spearheading these investigations

said that Portcullis TrustNet Group in British Virgin Islands is believed to be the biggest facilitator for these offshore investments by Indians. “Of these 20 persons under scanner, most of the offshore investments are in British Virgin Islands followed by Samoa and Malaysia,” said an official.

Among the names under scanner in AP are those of a leading infrastructure giantinvolved in various business ventures including power projects, hotels and malls, an MP and industrialist from Telangana region who is closely related to a former Union minister, a former promoter of a troubled infrastructure firm and the promoters of a local pharma company as well as the brother of a leading infrastructure baron. In fact, multiple members of each of these families are suspected to have undeclared investments in these offshore hideaways.

Credit: Times of India