India seeks BRICS mechanism to nail Tax dodgers

India has stressed the need for a mutually acceptable mechanism among BRICS nations to prevent multinationals from dodging taxes, along with norms to curb black money and bring those accused of corruption and tax evasion to book.

“Another key issue that we are pushing is the issue of tax evasion, black money and corruption. Under the complex international tax architecture, there are companies, especially MNCs, which have a presence across borders and end up paying no tax anywhere. They shift their profits,” said Amar Sinha, secretary economic relations in the ministry of external affairs. Sinha is also BRICS Sherpa.

Prime Minister Narendra Modi had pushed the issue of tackling black money at the BRICS summit, keeping with his government’s agenda of bringing back black money stashed away by Indians abroad. Sinha said that among the key ideas agreed to by BRICS leaders was that taxation should happen at the point where the activity takes place rather than where companies’ registered headquarters are or where their main subsidiary or the holding company is. Sinha also said that there was a need for mutually agreeable norms to bring white collar criminals to the book.

“Both people who are needed for corruption or tax evasion have to be brought back. Along with that the assets and the money that is parked in safe havens need to be brought back. So tax evasion, black money and people who are needed in corrupt cases, etc., are key decision of the BRICS leaders and develop norms which could be accepted by others,” he said.

At the BRICS Business council meet, Modi had said, “Our agencies must also build mechanisms of information sharing to bring to justice the tax offenders and money launderers. BRICS should push for empowering the global governance institutions to reflect today’s reality.”