G20 BLACK MONEY ISSUE

The Ministry of External Affairs has gone on the front foot to project how the 'forceful intervention' by PM Modi on the issue of black money led to a clause on combating tax evasion being included in the final Communique. In his brief address at the G-20, Modi put Black Money at the centre of his agenda. He told world leaders, 'Increased mobility of capital and technology has created new opportunities for avoiding tax and profit sharing. I urge every jurisdiction, especially tax havens, to provide information for tax purposes in accordance with treaty obligations.' Black money was originally not on the G-20 agenda. But soon after the PM's address, the G-20 office shared a draft clause on black money with all the delegates. India's position was welcomed by BRICS nations, especially Brazil and South Africa. The clause on Base Erosion and Profit Sharing (BEPS) Action Plan was finally included as paragraph 13 in the G-20 declaration and was touted as a major accomplishment of the Prime Minister during his first G-20 summit. The aim is to push for greater transparency in global tax laws and also greater uniformity in tax structure across countries. In addition, the plan is to make it compulsory for countries to share account information with tax authorities from other nations by 2017-18.

Remmitance relief for Indians abroad

Another key success of the Prime Minister was to push the G-20 towards taking 'strong practical measures' to reduce the global average cost of transferring remittances. India's is the world's largest recipient of remittances from non-residents. The figure is a staggering $ 71 billion dollars every year, much more than the annual remittances by the Chinese and the Philipinos. But what irks Non Resident Indians is the high transaction fees levied by banks, which can be as much as 10 per centof the total transaction amount. The three page G-20 communique said, "We commit to take strong practical measures to reduce the global average cost of transferring remittances to five per cent and to enhance financial inclusion as a priority. The G20 recognizes the value of remittance flows in helping to drive strong, sustainable and balanced growth.' Modi's Sherpa at the G-20 Suresh Prabhu told journalists that India had succeeded in convincing the Saudis to reduce the cost of remittances to 3.5 per cent. NRIs are now anxiously waiting for the agreement to be implemented.