2023-07-16 15:14:40
Finance Minister Nirmala Sitharaman on Sunday pitched for strengthening the global architecture to combat financial crimes, money laundering, and sharing of information regarding different asset classes including crypto currencies. She announced initiating a pilot project in the South Asia region for tax and financial crime investigation under India’s G20 Presidency.
The FM simultaneously stressed on attracting private investment to develop urban infrastructure. Sitharaman was addressing two events – ‘Combating Tax Evasion, Corruption, and Money Laundering’ and ‘Investor Dialogue’ on the sidelines of the G20 Finance Minister and Central Bank Governor (FMCBG) meeting under India’s presidency here.
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Pilot programme
Addressing the tax symposium, the FM said that under G20 Presidency, India has taken the lead in building capacity in tax and financial crime investigation in South Asian region in collaboration with the OECD. “As a first step, it gives me immense pleasure to announce the launch of a pilot programme on tax and financial crime investigation in collaboration with the OECD for the South Asian region starting from July 18 at the Regional Campus of National Academy of Direct Taxes in New Delhi,” she said. This institutionalized initiative, she said, will help in addressing the specific needs of countries in the South Asia region.
According to her, during tax investigations, tax administrations acquire access to large amounts of incriminating information obtained through tax treaties which may have relevance for investigations in other financial crimes. However, the disclosure of such information to other domestic law enforcement agencies is subject to seeking consent from foreign jurisdictions for the use of such information for non-tax purposes.
She said that the recent report of the Global Forum will assist interested jurisdictions to streamline the processes involved in obtaining consent for the use of information obtained through tax treaties for non-tax purposes. “The suggestions in the report would help to make the process of obtaining consent from foreign jurisdictions, more efficiently and speedy,” she said.
Also read: Australia upbeat on global tax talks at G20 in India
Innovative financing
Earlier, addressing Investor Dialogue, she acknowledged that the situation with regard to financing infrastructure has become challenging in the wake of monetary policy tightening in key markets. Tight monetary policy leads to the hardening of interest rates and the burgeoning debt repayment burden.
Against this backdrop, she said, “Innovative financing and funding mechanisms for cities might have significant potential to fill the increasing (funding) gaps. It can complement the pool of funds available for infrastructure in addition to public investment and financing provided by Multilateral Development Banks (MDBs).”
“We need alternate solutions to leverage private sector participation in this context. Innovative financing instruments such as blended finance, structured project finance, securitization, thematic bonds, biodiversity offerings and local currency finance, are some of the needs,” Sitharaman said.
In his valedictory address, World Bank Chief Ajay Banga felt that the scale of the challenges is too big for any one government or multilateral bank to do so on its own and getting the right level of partnerships across multilateral banks is going to be important to scale. but “what I think is even more important is getting replicability, scalability.”
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Published on July 16, 2023
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