Endorsing India’s concerns about black money and tax avoidance, G20 leaders Sunday promised to modernise international tax rules and work to prevent cross-border tax evasion.
In a joint communique issued at the conclusion of their summit, the G20 leaders said: “We welcome the significant progress on the G20/OECD (Organisation of Economic Cooperation and Development) Base Erosion and Profit Shifting (BEPS) Action Plan to modernise international tax rules. We are committed to finalising this work in 2015, including transparency of taxpayer-specific rulings found to constitute harmful tax practices.”
The communique stated that to prevent cross-border tax evasion, “we endorse the global Common Reporting Standard for the automatic exchange of tax information (AEOI) on a reciprocal basis”.
“We will begin to exchange information automatically with each other and with other countries by 2017 or end-2018, subject to completing necessary legislative procedures,” it stated.
Earlier Sunday, Indian Prime Minister Narendra Modi made a strong pitch at the G20 summit for repatriation of black money by stressing on the need for close coordination to address the challenge of black money, and linked it to security issues such as terrorism, a major global concern.
Addressing a G20 session titled “Delivering Global Economic Resilience”, the prime minister voiced support for a new global automatic exchange of information, saying it would be instrumental in getting information of the unaccounted money stashed abroad and help bring it back.
Making an intervention on issues of tax evasion on the second and final day at the G20 Summit, the prime minister “reiterated his call for close policy coordination among major economies, saying this is important not just for addressing the challenge of black money, but also for security issues like terrorism, drug trafficking, arms smuggling etc.”, according to an official statement.
Following the issuance of the communique, the Prime Minister’s Office tweeted: “India’s concerns on Black Money & Tax Avoidance have found an echo & have been taken on board the final G-20 communique.”
It also tweeted about the communique’s reference to the BEPS action plan and transparency in taxpayer specific rulings constituting harmful tax practices.
“India scores at G-20,” Syed Akbaruddin, spokesperson of the ministry of external affairs, tweeted. “PM @narendramodi strong intervention gets backing for inclusion in tax matters in final communique.”
This apart, leaders of the world’s largest developed countries and emerging economies said in the communique that their top priority was raising global growth to deliver better living standards and quality jobs for people across the world.
“Raising global growth to deliver better living standards and quality jobs for people across the world is our highest priority. We welcome stronger growth in some key economies,” the communique stated.
However, it said that the global economic recovery was “slow, uneven and not delivering the jobs needed”.
“The global economy is being held back by a shortfall in demand, while addressing supply constraints is key to lifting potential growth,” it said.
“We are implementing structural reforms to lift growth and private sector activity, recognising that well-functioning markets underpin prosperity. We will ensure our macroeconomic policies are appropriate to support growth, strengthen demand and promote global rebalancing.”
The communique said that while the leaders endorsed an ambitious goal set this year to lift the G20’s GDP by at least an additional 2 percent by 2018, the grouping’s commitments, if fully implemented, would deliver 2.1 percent as indicated by International Monetary Fund-Organisation of Economic Cooperation and Development (IMF-OECD) analysis.
“This will add more than $2 trillion to the global economy and create millions of jobs. Our measures to lift investment, increase trade and competition, and boost employment, along with our macroeconomic policies, will support development and inclusive growth, and help to reduce inequality and poverty,” it added.
Stating that tackling global investment and infrastructure shortfalls was crucial to lifting growth, job creation and productivity, the leaders endorsed the Global Infrastructure Initiative, a multi-year work programme to lift quality public and private infrastructure investment.
The communique stated that action to boost growth and create quality jobs have been set out in a Brisbane Action Plan, adding that the leaders would ensure the growth strategies continued to deliver and would review progress at the next summit.
The leaders also expressed concern over the humanitarian and economic impact of the Ebola outbreak in Guinea, Liberia and Sierra Leone.
“We support the urgent coordinated international response and have committed to do all we can to contain and respond to this crisis,” the communique stated.
Published in The Indian Sun / Indian Magazine in Australia