To check illicit financial flows across borders, the government is renegotiating bilateral treaties with many countries to limit tax benefits to genuine investments and curb the routing of Indian money to safe havens, a senior Finance Ministry official said as per the PTI report.
While noting that the quantum of domestic black money would be no less than what is supposed to be stashed abroad, Revenue Secretary Shaktikanta Das said that the government is "renegotiating many of the tax treaties to deal with the issues of Limitation of Benefits.
"Because, if there is a tax haven and if the funds are routed through the tax haven then we have to work on the whole concept of limitation of benefits," he said.
"For the entire quantum of black money, I think, nobody has any estimate. But I can say that quantum of domestic black money is no less than what is supposed to have been or said to have been stashed abroad," he added.
The comments come at a time when the Supreme Court- constituted Special Investigation Team (SIT) has detected funds worth about Rs 4,479 crore held by Indians in a Swiss branch of HSBC bank, while unaccounted wealth totalling Rs 14,958 crore have been traced within home.
The SIT has also made a number of suggestions to check the black money menace, including by way of re-negotiation of various treaties signed by India with foreign countries.
"We are renegotiating many of the taxation treaties which are dealing with issue of capital gains. We are dealing with the issue of harmful tax practices and we are dealing with BEPS (Base Erosion and Profit Shifting) in manner that due recognition is given to where economic activities takes place.
"In other words, if we are dealing with MNCs... Which may be located in tax havens or the US, and business can be in India, China or elsewhere. So, while sharing the taxation, due weightage should be given to countries like India and China where economic activities take place," he added.
Das also said the government is committed towards bringing a moderate, predictable, non-adversarial and investor friendly tax regime which would help to deliver on the 'Make in India' initiative and promote ease of doing business in India.
"The tax department is moving towards putting in place an investor friendly and facilitative tax system which would help to deliver on the 'Make in India' initiative and promote ease of doing business in India," Das said at an event organised by industry body CII.