Close co-ordination important for addressing black money challenge: PM Modi at G20 Summit

Brisbane: As India makes attempts to recover black money from abroad, Prime Minister Narendra Modi on Sunday asked every country, especially tax havens, to provide information for tax purposes in accordance with treaty obligations.

Raising the pitch on the black money issue, Modi in his intervention at the summit of the Group of 20 industrialised and major emerging economies called for close global coordination to address the challenge posed by it.

Read: PM Modi wants G20 to take on tax havens

Modi voiced India's support for a new global standard on automatic exchange of tax information, saying it would be instrumental in getting information relating to unaccounted money hoarded abroad and enable its eventual repatriation.

He also extended India's backing for all initiatives to facilitate exchange of information and mutual assistance in tax policy and administration.

The prime minister made the remarks at the plenary session on the subject of "Delivering Global Economic resilience" on the second and final day of the summit held at the Brisbane Exhibition and Convention centre.

He also expressed the hope that Base Erosion and Profit Sharing (BEPS) system would fully address concerns of developing and developed economies.

BEPS is a technical term referring to the effect of tax avoidance strategies used by multinational companies on countries' tax basis. BEPS is known more commonly as "Transfer pricing".

This term is used in a project headed by the OECD that is said to be an attempt by the world’s major economies to try to rewrite the rules on corporate taxation to address the widespread perception that the corporations don’t pay their fair share of taxes.

The prime miniser also said that increased mobility of capital and technology have created new opportunities for avoiding tax and profit shifting.

Read: G20 Summit: PM Modi asks for unbound reforms

Modi underpinned the need for the world community to take coordinated decisions although each country has its domestic priority.

"Need for policy coordination among major economies remains strong," he said.

"Close coordination is imporant not just for addressing the challenge of black money but also security issues like terrorism, drug trafficking and arms smuggling," he said.

Touching upon the resilience of the financial system in the world, Modi said it will also depend on cyber security.

Modi also proposed to the G20 to set up a global virtual centre for clean energy research and development. The Group of Twenty (also known as the G-20 or G20) is an international forum for the governments and central bank governors from 20 major economies.

Read: Reform must be insulated from political pressures: PM Narendra Modi tells G20 leaders

The members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, United States and the European Union (EU). The EU is represented by the European Commission and by the European Central Bank.

Collectively, the G-20 economies account for around 85 per cent of the GDP, 80 per cent of world trade (or, if excluding EU intra-trade, 75 per cent), and two-thirds of the world population. The G-20 heads of government or heads of state have periodically conferred at summits since their initial meeting in 2008 in the US.

G20 host and Australian Prime Minister Tony Abbott has vowed a crackdown on tax evasion by MNCs and wanted the G20 countries to have intense cooperation in this regard.