Keen to put in place a system to prevent international tax evasion and avoidance, Finance Minister Arun Jaitley has made a strong pitch for countries to implement Common Reporting Standards on automatic exchange of information.
Jaitley in his intervention during the 49th Annual Commonwealth Finance Ministers Meeting in Lima welcomed the efforts of OECD in areas of BEPS project and automatic exchange of information which have important implications for Commonwealth nations.
He emphasised the need to ensure that the Common Reporting Standards on Automatic Exchange of Information are implemented globally on a fully reciprocal basis as this would be a key to prevent international tax evasion and avoidance,” an official statement said.
The OECD/G20 Base Erosion and Profit Shifting (BEPS) Project provides governments with solutions for closing the gaps in existing international rules that allow corporate profits to ‘disappear’ or be artificially shifted to low/no tax environments, where little or no economic activity takes place.
Revenue losses from BEPS are conservatively estimated at $100-240 billion annually, or anywhere from 4-10 per cent of global corporate income tax (CIT) revenues.
Jaitley noted that India has been the beneficiary of these systems by getting vital information on tax evasion and emphasised the need for genuine and equitable multilateralism in deciding global norms and standards on taxation.
The meeting of Commonwealth finance ministers also focused on issues relating to infrastructure financing and small states trade financing facility.
Jaitley is on an official tour from October 7 to 11 to Peru to attend the annual meetings of the International Monetary Fund(IMF) and the World Bank as well as other associated meetings.