The issue of automatic sharing of tax information would figure prominently during the meeting of G-20 Finance Ministers and Central Bank Governors at Cairns, Australia.
Finance Minister Arun Jaitley and RBI Governor Raghuram Rajan are expected to attend the meeting to be held on September 20-21. This meeting will be followed by G20 Summit at Brisbane in November.
“…We expect a group of countries to agree to a reasonably rapid timeline (for implementing automatic exchange of tax information)…In September, we will be outlining on implementation plans, the timelines and approaches will be taken,” Australia’s G20 Finance Deputy Secretary Barry Sterland told reporters here.
Amid large number of tax avoidance cases, India and other economies have been pressing for effective system for getting financial information from other nations, especially low tax jurisdictions.
Shifting corporate profits from high-tax countries to low tax jurisdictions is being debated worldwide in the backdrop of several large MNCs not paying fair share of taxes anywhere.
Automatic exchange of information, Sterland said, is “the most powerful tool” which will help in curbing tax evasions.
“So it brings an enormously powerful tool for tax administrators to cooperate and exchange information,” he said, adding, the G-20 has agreed to a common reporting standards and a new approach to facilitate the exchange of tax information.
As regard to tax avoidance, he said, issues, including progress on modernising international tax system for 21st century and reforms in the international institutions would also figure in the meeting.
In Sydney in February, the G20 asked all tax jurisdictions that have not yet complied with the existing standard for exchange of information on request to do so and sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.
Besides, Sterland said the ministerial meeting would also deliberate on macro-economic cooperation among the G20 countries to push global GDP by an additional 2 per cent by 2018.
The G20 membership represents about two-thirds of the world’s population, 85 per cent of global gross domestic product and over 75 per cent of global trade.
The members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the UK, the US and the European Union.