Black money in Switzerland and other tax havens

JBH22

Senior Member
Joined
Jul 29, 2010
Messages
6,545
Likes
18,074
when will the Black Money come back to India. even If BJP win 2014 elections, will they bring the money back??? Is nobody in BJP having money in Swiss Banks??? these are all the questions to be answered by the future and can only be answered by the time itself........
Let's not be fool BJP,Congress,DMK or for that matter any party have black money otherwise how can they finance their election campaign.It was reported that last general elections a colossal $3billion USD were spent in India while in USA its around USD$4biliion just to give idea.

Sadly nothing can be done for now unless Indians decides a radical change is needed,how can a govt with recurrent scams going on smoothly?
 

ejazr

Ambassador
Joined
Oct 8, 2009
Messages
4,523
Likes
1,388
I really want to see the report on who came up with the 70 lakh crore estimate (USD $1.4 trillion). I am not saying its not true, I just want to know where its coming from and who worked on the getting the numbers.

The most credible and professional done report was the one done by Global Financial Integrity (GFI) which did an extensive focus on India as well as other developing countries on illegal outlfows and inflows. They estimated Indian black money SINCE 1948-2008 to be around $460 Billion. If we assume the lost of $20B (the average outflow from 2004-2008), we could say $500B+ maybe even $600B.

Here is there 2010 press release, you can get the full report from their website
New Report Finds Illicit Capital Flight out of India US $462 Billion
WASHINGTON, DC — "The Drivers and Dynamics of Illicit Financial Flows from India: 1948-2008," released today from Global Financial Integrity (GFI), estimates that tax evasion, crime, and corruption have removed gross illicit assets from India worth US $462 billion. The report also finds that the faster rates of economic growth since economic reform started in 1991 led to a deterioration of income distribution which led to more illicit flows from the country. Moreover, the report finds that the poor state of governance is reflected in a growing underground economy which in turn has fueled more transfers of illicit capital from India. This analysis is cast in terms of a pre- and a post-reform period spanning a total of 61 years since independence.

"This report puts into stark terms the financial cost of tax evasion, corruption, and other illicit financial practices in India," said Global Financial Integrity director Raymond Baker. "It also shows that these illicit outflows contribute to stagnating levels of poverty and an ever widening gap between India's rich and poor.

Primary report findings include:

* From 1948 through 2008, India lost a total of US $213 billion in illicit financial flows (or illegal capital flight). These illicit financial flows were generally the product of: tax evasion, corruption, bribery and kickbacks, and criminal activities.
* Adjusted Estimates: The present value of India's total illicit financial flows (IFFs) is at least US $462 billion. This is based on the short-term U.S. Treasury bill rate as a proxy for the rate of return on assets.
* India's aggregate illicit flows are more than twice the current external debt of US $230 billion.
* Based on the last five years of the study, 2004-2008, India lost assets at a rate of US $19 billion per year.
* Total capital flight out of India represents approximately 16.6 percent of India's GDP as of year-end 2008. In present value terms, India lost an equivalent of about 36 percent of its 2008 GDP which represents a staggering loss of capital.
* Some 68 percent of India's aggregate illicit capital loss occurred after India's economic reforms in 1991, indicating that deregulation and trade liberalization actually contributed to/accelerated the transfer of illicit money abroad.
* IFF Drivers: High Net-Worth Individuals (HNWIs) and private companies were found to be the primary drivers of illicit flows out of India's private sector. India's underground economy is also a significant driver of illicit financial flows.
* IFF Trends: From 1948 through 2008 the Indian private sector shifted away from deposits into developed country banks and moved more of its money into offshore financial centers (OFCs). The share of OFC deposits increased from 36.4 percent in 1995 to 54.2 percent in 2009.

"In this report we clearly demonstrate how India's underground economy is closely tied to illicit financial outflows," said GFI lead economist and report author, Dr. Dev Kar. "The total present value of India's illicit assets held abroad accounts for approximately 72 percent of India's underground economy. This means that almost three-quarters of the illicit assets comprising India's underground economy—which has been estimated to account for 50 percent of India's GDP (approximately US $640 billion at the end of 2008)—ends up outside of the country. We also find that there is a statistical correlation between larger volumes of illicit flows and deteriorating income distribution."

The report also makes recommendations for economic reforms and good governance measures and contains comprehensive tables, charts, and other data for detailed analysis of India's illicit financial flows, economic indices, and history of financial reforms.
Also, because India is an open democracy, news coverage of corruption and open discussions might people lead to think that India had the most black money as a nation parked outside the country. But if we look at GFI reports, thats not the case. Infact, comparing the 2000-2008 period, Indian black money outlfows does not even rank in the top 10. We actually tie with Indonesia at around 14. China by far has the largest illegal outflows followed by Russia and the wealthy oil sheikhdoms.


Read the summary and the full report from here http://iff-update.gfip.org/


Ofcourse, loosing $20-30Billion USD (as the report suggests) a year is no small amount for us. Its almost 2/3 of the defense budget or more than our education and health budget COMBINED. And remember this is YEARLY, not a one time thing like the 2G scam or CWG fiasco.
Although its not realistic to expect the entire money to be directly loss to government as it would only get a percentage of the outflow in the form of taxes e.t.c, it gives an idea of how much illegal outflows takes place.
 

Phenom

Regular Member
Joined
Mar 6, 2010
Messages
878
Likes
406
^^
If it is true, is it possible to get all that money back from Switzerland without completely ruining the Swiss economy?
 

ejazr

Ambassador
Joined
Oct 8, 2009
Messages
4,523
Likes
1,388
The Swiss economy won't be ruined by just Indian Black money coming back, but once we get our money back, the Chinese, the Russians and every other country will jump in and before that happens, the individuals who have black money will run away with their money. That is probably what the Swiss are afraid of. It will open the floodgates.
 
Joined
Feb 16, 2009
Messages
29,966
Likes
48,915
Country flag
The Swiss economy won't be ruined by just Indian Black money coming back, but once we get our money back, the Chinese, the Russians and every other country will jump in and before that happens, the individuals who have black money will run away with their money. That is probably what the Swiss are afraid of. It will open the floodgates.
The estimates for Indian black money range from 2 trillion to 7 trillion DOLLARS, this would make a dent. But I doubt all of it would be withdrawn in one shot.
 

Yusuf

GUARDIAN
Super Mod
Joined
Mar 24, 2009
Messages
24,328
Likes
11,832
Country flag
Peoe who say all of Swiss money is hard earned money of Indians, let me tell you it's not, except for scam monies. Most of these accounts are held by businessmen and it's just that they don't want to pay taxes here on their own "hard earned" money, they plant it in tax havens like Switzerland.

That apart I really doubt how many politicians have their accounts in Swiss banks. They keep in india and use in india. That's how they drive their election campaigns, buy votes, buy MPs, MLAs etc.

Let's not be under any false impression that the money in Swiss banks is the toil of all Indians. It is just money that has been deposited there after evading tax by big businessmen. Take the exame of Hasan Ali or whatever his name was, $8 billion in his name. He was a small businessman on e upon a time.
 

Oracle

New Member
Joined
Mar 31, 2010
Messages
8,120
Likes
1,566
Firstly revelation, secondly revolution. Sharad Pawar sure will make that list, and so do Mayawati, A.Raja, Karunanidhi etc. Keeping fingers crossed, until all is out in the open.
 

SpArK

SORCERER
Senior Member
Joined
Oct 24, 2010
Messages
2,093
Likes
1,112
Rs 30,000 Cr Black Money Recovered Since '09: CBDT

Rs 30,000 Cr Black Money Recovered Since '09: CBDT

Taxmen have seized black money to the tune of a whopping Rs 30,000 crore in the country in the past two years, said the Central Board of Direct Taxes (CBDT) which is set to get investigative powers to boost its drive against wrong-doers.

The CBDT is in the process of creating a Directorate of Criminal Investigation after getting approval from Finance Minister Pranab Mukherjee last week.

CBDT chairman Sudhir Chandra said they have gone after big shots and every search or survey has yielded more than Rs 100 crore in black money.

Addressing 'National Seminar on Black Money', Chandra said, "through IT searches and surveys, we have realised around Rs 30,000 crore of black money" in the past two years.

"In the last two years, through IT searches, we have uncovered Rs 18,500 crore of black money. That shows we have not gone after small people and we have gone after big people. What is the use of mopping the floor if the tap is open. We are trying to close the taps?" he said.

He said his officers did not move out of office unless they got clinching and conclusive information.

Noting that they used to get a lot of complaints, mainly due to personal vendetta, he said the CBDT was profiling High Networth Individuals. "Everyone is on our radar," he said.

He said since February, the Income Tax Department has issued 1.15 crore refunds across the country which runs into Rs 1.04 lakh crore.

"The income tax refund is your money. In terms of money, it is Rs 74,000 crore upto March and another Rs 30,000 crore in April and upto May 15," Chandra said.

He also said the income tax collection has gone up by three times in the first 45 days of this fiscal compared to the same period last fiscal.

"Last year till May 15, the gross collection of income tax was Rs 9,000 crore, this year it is Rs 28,000 crore. In 45 days, it has grown up three times," he said.

He said the Income Tax investigation department is being strengthened.

"We are also setting up a new dedicated and computerised exchange of information cell. Whatever information we want from countries, they can send it to our cell, we will coordinate with identical cells of foreign countries. CBDT is also in the process of creating a Directorate of Criminal Investigation. The Finance Minister has given his approval last week. We need infrastructure to support it," he said.

On the Liechtenstein accounts, he said the information what India got from them cannot even be shared with the Enforcement Directorate.

"Now we are devising some methods to allow non-tax enforcement agencies to access this. India is also considering signing multilateral convention and mutual assistance in tax matters," he said.

Noting that India plays a leading role in improving the coordination and exchange of information on black money, Chandra said the situation has changed with regard to sharing information.

"We have identified tax havens. We have negotiated agreements with 14 countries. Three agreements with Bahamas, Nermuda and Isle of Man are already in place and we are getting information from these countries," he said.

He also said that there was a provision of declaring a country as non-cooperative jurisdiction if it does not share information.

"Once this is done, a company of that country doing business in India or an Indian company doing business with that country, there will be a higher withholding of tax," he said.
FILED ON: MAY 18

news.outlookindia.com | Rs 30,000 Cr Black Money Recovered Since '09: CBDT
 

Bot

Non stop posting
Banned
Joined
Jan 19, 2011
Messages
110
Likes
26
Rs 30,000 Cr Black Money Recovered
Good that its recovered but where does the money go from there , what is it spent on ?

Looks like some gangster movie story of recovered drugs and ammo back tracked to the goons at a resell price
 

sayareakd

Mod
Joined
Feb 17, 2009
Messages
17,734
Likes
18,953
Country flag
Income tax department can get Rs 40,000 cr from this one man along

Hasan Ali
if GOI give incentive of 1% to officers of Income tax to recover the same i am sure that IT officers will recover 60,000 cr from him.
 

The Messiah

Bow Before Me!
Senior Member
Joined
Aug 25, 2010
Messages
10,809
Likes
4,619
Income tax department can get Rs 40,000 cr from this one man along

Hasan Ali
if GOI give incentive of 1% to officers of Income tax to recover the same i am sure that IT officers will recover 60,000 cr from him.
:pound:

it is the money of people running the govt and regional parties....so why would they give command ?
 
Joined
Feb 16, 2009
Messages
29,966
Likes
48,915
Country flag
Pressure grows for India to bring back 'black money' stashed overseas - CSMonitor.com

Pressure grows for India to bring back 'black money' stashed overseas

New Delhi

Swami Ramdev, the Indian yoga master turned anticorruption campaigner, ended his protest fast over the weekend, but not without spurring popular pressure on the government here to recover so-called black money.


Black money includes embezzled government funds, private money hidden from tax collectors, and the profits of illegal enterprises. Nearly 464 billion dirty dollars have left India since its independence, according to an estimate by the Global Financial Integrity watchdog group in Washington.

Indians want all that loot back.


Once illicit assets leave Indian shores, however, it's extremely difficult to get them back, even with an international treaty for that purpose.

The embattled Indian government says the challenge is getting notorious tax-haven nations to help. But international experts argue the most common obstacle nations face in trying to recover money is their own governments.

"Governments are often voted in on the basis that they will fight corruption," says Tim Daniel, a partner with Edwards Angell Palmer & Dodge, a London-based law firm. "But after a couple of years they begin to lose interest because they realize that these [black] moneys are amassed by people who were responsible for bringing them to power."


So far, the Indian government has convinced few people that they are serious about cracking down on corruption and recovering black money.
Corruption activists going rogue

As a result, anticorruption activists have started going rogue. Mr. Ramdev spoke of raising an "army" of youths – unarmed, he later clarified – to protect him in case the police once again attacked one of his rallies. The comments raised eyebrows in Indian media, but paled in comparison to statements made at an April convention held by Transparency International India at the Habitat Center, a staid den of polite society here.

One speaker, a former income tax commissioner named Vishwa Bandhu Gupta, lamented that during the 2001 terrorist attack on Parliament some policemen gave their lives to save "these scoundrels." He claimed another problem was that most Indian media has been bought off.

Many in the audience cheered and offered drastic remedies. One suggested it was time for the Army to take over and clean house. Another spoke of creating a paramilitary army to target the corrupt.
The Swiss are trying really quite hard now to do something about this," says Mr. Daniel. "When it comes to assets held by kleptocrats "¦ the Swiss passed a law earlier this year that allows them to take action unilaterally – this is a real breakthrough."


International framework for action against corruption

That's because often victim governments won't push to recover monies – or will call off actions. He cites the case of Asif Ali Zardari, the current president of Pakistan. During the previous regime of Gen. Pervez Musharraf, Daniel worked with the government to try to recover a mansion owned by Mr. Zardari in England.

Then, "Zardari pulled what I call the ultimate escape trick, which is to be elected president. And we were told to drop the proceedings," says Daniel.

Daniel says that only $5 billion in illicit assets from all nations have ever been recovered. "It's a pretty bleak picture," he adds.

But the international legal framework for recovering more of these funds is slowly emerging with the signing of the UN Convention Against Corruption (UNCAC) by 140 countries. India recently ratified the treaty, which binds countries to adopt a standardized set of laws for handling corruption. Without these standards in place, countries like Switzerland may be disinclined to help recover stolen assets.

It will take a couple years at least to implement UNCAC, says a Western diplomat.
Taking action

Even then, the government appears "not very serious" at recovering black money, says Anupama Jha, executive director of Transparency International India. "Whatever step it has taken so far is only after pressure from civil society."

The Indian government is taking some action. The government is spending $1.7 million to figure out just how much black money is at home and abroad. On top of ratifying UNCAC, India has signed Tax Information Exchange Agreements that can penetrate bank secrecy with 27 countries.

The finance ministry says it is prosecuting black money cases totaling some $17 million from accounts in Germany. At home, the ministry claims recovering $6.7 billion in unpaid income tax and detection of $12.4 billion in other tax scams over the past two years.

A press handout from the ministry argues that most countries still do not have an agreement with India to assist in tax collection because "it involves commitment of domestic resources for collection of tax demand of the other country."

Experts say, however, that implementation of UNCAC should surmount most hurdles to asset recovery – so long as a country's government keeps working to recover black money.

"If states are not willing to tackle corruption and take action to recover assets, what can we do about that?" asks Maud Perdriel-Vaissiere, managing director of SHERPA, a Paris-based group of anticorruption advocates.

She says moves are afoot to interpret UNCAC in a way that allows private citizens – not just governments – to initiate legal proceedings to recover black money on behalf of victim states. Ministry of Finance spokesman D.S. Malik rejected that interpretation saying "these are government dues, so government has to do it."

Feeding off such energy, Mr. Gupta suggested it was time to boycott Switzerland, a country where Indians suspect much of the black money is stashed in secret accounts.
 
Joined
Feb 16, 2009
Messages
29,966
Likes
48,915
Country flag
Swiss treaty won't allow India to glean data on older accounts - Hindustan Times

Swiss treaty won't allow India to glean data on older accounts


Although the Swiss Parliament has ratified a treaty allowing Indian authorities to get information on illegal funds stashed in Swiss banks, the government can't glean much data as the pact is applicable with prospective effect, a top tax official said on Tuesday. "As far as I can remember, it is pro


spective...I think it is prospective date, from the date the treaty comes into effect," Central Board of Direct Taxes chairman Prakash Chandra told reporters when asked about the prospects of getting data from the Swiss banks.
This would mean that accounts opened in the secretive Swiss Banks before the ratification of the treaty would not be liable to scrutiny by Indian authorities.

Finance minister Pranab Mukherjee and Swiss Federal Councillor Micheline Calmy-Rey had in August last year signed a protocol to amend the double taxation agreement (DTA) in the area of taxes, which was ratified by the Swiss Parliament's upper house on June 17.

Chandra said that although the Swiss Parliament has ratified the treaty, under the Swiss law around 90-100 days are required to make the law take effect.

Once the treaty takes effect, "The understanding is that yes, if we ask specific information with regard to a tax payer giving details as asked for, then they are willing to part with that (information) which earlier was not the case," Chandra said.

Meanwhile, Chandra said a government-constituted committee on black money has received more than 2,500 suggestions from across the country in the last 10 days to deal with the issue.

When asked about efforts to re-negotiate DTAA with Mauritius, news on which had led to a sharp fall in equity markets earlier this month, Chandra said both the countries have decided to take the negotiations - stuck since 2008 - forward and will be meeting to discuss the modalities.

He, however, refused to give any timeframe for the same. The BSE Sensex had tanked by 550 points in intra-day trade on June 20 on fears that the Government might impose capital gains tax on investments routed via Mauritius once the DTAA is through.

Chandra said the quarterly tax numbers will have to grow at a "sustained" 20-24 per cent in the coming quarters in order to achieve the tax collection target of Rs 5,32,000 crore announced in the Budget.

In order to check the illegal fund flows, the Government had decided to place Indian tax officers abroad and two such officials have already been posted in Singapore and Mauritius.

Plans are afoot to operationalise similar offices in Japan, UAE, Germany, UK, USA, France and Canada, he said.
 

Dovah

Untermensch
Senior Member
Joined
May 23, 2011
Messages
5,614
Likes
6,793
Country flag
If we are talking of "only" Swiss Banks then perhaps but actual black money siphoned off would dwarf this amount easily.
 

Yusuf

GUARDIAN
Super Mod
Joined
Mar 24, 2009
Messages
24,328
Likes
11,832
Country flag
The amount of black money within India would dwarf the size of the Indian economy itself.
 

Blackwater

Senior Member
Joined
Jan 9, 2012
Messages
21,156
Likes
12,211
It means Swiss bank runs on Indian money. we own Swiss bank. Wow that a good news
 

thakur_ritesh

Ambassador
Joined
Feb 19, 2009
Messages
4,435
Likes
1,733
one wonders what would be the actual size of indian economy after all.

  • world bank puts it at 1.729t usd.
  • there's been a question mark on the methodology used, rough estimate is the economy would at least be revised by 50%.
  • indians have stacked up worth around 800b usd in jewellery.
  • there would be many-many treasures out there running into hundreds of billions, that will remain where they are and those unearthed would still not make their way to the economy but assuming they would, that will be another significant jump.
  • and last of all the parallel economy and money stacked outside the country. the parallel economy is supposed to be worth at least 50% of the present which means around 900b usd, and money stacked over seas could well run into hundreds of billions.

if all of this were to today emerge and form a part of the economy, boy the economy would be at least around 4.5t usd as of 31st march, 2011 and the upper limit can be left to imagination (i havent included the treasures bit in this 4.5t usd and assumed money stacked overseas as 200b usd). india is a poor country, who says?

mind you this estimate of 4.5t usd has been projected for the year 2020.
 

Latest Replies

Global Defence

New threads

Articles

Top