Politics of black money: Can FM rework tax treaties?
These are trying times for Finance Minister Pranab Mukherjee. The Parliamentary Standing Committee is putting pressure on him to justify the need for non-disclosure clauses in tax treaties. But some experts say that going by recent events, the Standing Committee may want these clauses relaxed or diluted, but India may not have the clout to make that happen.
Nihar Jambusaria, National Head - Tax Advisory Services, BDO India said, "If India had the clout, they could have persuaded Swiss government to declare the names upfront and there would not have been postponement."
Others feel India may be able to manage some wriggle room.
Robert Aziz, Partner - Corp Intl Tax, BDO UK said, "Whether it has the clout of its own right? I couldn't say. The European Union as a block of countries has had that clout. I am not sure whether India has that clout itself, but it certainly would have significant influence."
But most of them are downright dismissive.
Frank Biermann, Head - Tax, BDO Hamburg said, "Well you would certainly hope India has, but I am afraid, I doubt that a little because any particular single country I don't think has the clout to do that. Probably the US, certainly not Germany which I can speak for."
So is there a consensus on any point? Yes, the finance minister certainly has a lot on his plate and budget 2011 could well see him introducing specific measures to check tax evasion.