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How to bring back illicit money stashed in foreign safe havens

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India says that its citizens have $60 billion in assets stashed abroad. Our government also is determined to get back assets worth $11 billion hidden in foreign safe havens. India was able to get full names of 50 offenders, and several others with name- initials that held Swiss accounts. The flight of money leaves no easy trail. It goes into foreign `havens’ through benami (nameless or surrogate) account holders.

Indians do not put all their secret money in Swiss banks. In recent years, Indians’ Swiss deposits have been dwindling. They put it in about 80 tax havens including British and US islands (offshore), Liechtenstein, Luxemburg, the Channel Islands, the UKs Offshore Territories such as Cayman Islands, British Virgin Islands, and Bermuda, besides Switzerland. Then, there are Asian tax havens like Hong Kong, Macao, Singapore, Bahrain and Malaysia, rather than Switzerland. While 31 per cent of the Indian wealth was kept in Switzerland, 53 per cent was held in Asian tax havens (as of 2015).

Indians feared Swiss banks may share their data with the Indian government. This fear is reflected in declining Swiss deposits. Money parked by Indians in Swiss banks rose 50 percent to about Rs 7000 crore in 2017 compared to2016. However, on the whole, Indian deposits have been declining since 2014 (diverting to Asian havens). As a blow to secrecy, or to check illicit deposits, Switzerland, in its federal gazette, have published names of Indian account-holders in two parts, one full names, and the other identifed by initials Several of these are believed based in Kolkata, Gujarat, Bengaluru, Delhi and Mumbai.

Pakistan relies on Tax Amnesty Schemes. These schemes discourage honest tax payments. Even IMF has expressed ennui on extending the deadline for the current Amnesty Scheme. Even offenders in India did not cough up a penny. Incentive schemes look better than legal mousetraps

In India,........

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