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It's a good time for it, if India is serious about taking on the Swiss banks
Is this just an election promise to be dumped once the polls are over? Perhaps. But should the next government be serious about this issue, the timing may be just right.
In mid-March, Switzerland gave in to pressure from the OECD countries on revising double-taxation agreements. Then, at the recent G-20 summit, the Swiss renewed their commitment to no longer make a distinction between tax fraud and tax evasion, and provide judicial assistance in case of the latter.
At the Swiss finance department in Bern, spokesman Roland Meier assures that if the BJP leader wishes, he can eventually ask Switzerland to renegotiate the double taxation avoidance treaty between the two countries. Then, respective tax authorities could cooperate with each other on tax evasion issues. Of course, this could take ages.
As for Indian money deposited in Swiss accounts—estimates vary between $500 billion and $1,400 billion—a spokesperson for the Swiss Bankers Association, James Nason, says it sounds outrageous. "These allegations are pure fantasy; the person who invented them is highly irresponsible," he says. According to Swiss National Bank statistics, foreign private clients account for only 671 billion Swiss francs ($585 billion) of the total managed assets worth 3,822 billion francs.
Moreover, he points out that there is no way to know how much Indian money there is in Switzerland, since the central bank doesn’t break its figures down according to the nationality of clients. But one thing Mr Advani must keep in mind, stresses the Swiss banker’s representative, is that no fishing expedition will be allowed. Nason is adamant that only in cases of serious proven suspicion of tax evasion will Swiss bankers share information on account owners.
Nevertheless, "there has been a shift in the Swiss mindset", notices economic reporter Ram Etwareea of the leading daily Le Temps. Traditionally, the people of Switzerland have been viscerally attached to banking secrecy, a pillar of the sector that accounts for almost 9 per cent of the country’s gdp. But UBS’s recent $60 billion public money bailout has made the Swiss people, beyond the usual lefties, more critical about their banking sector. Charges that UBS assisted wealthy Americans conceal money in secret accounts offshore haven’t helped either.
In other words, if the sleuths at India’s Department of Revenue Intelligence are to be given the go-ahead to probe all the funny money stashed in Switzerland, there could not be a better time as now.
(The author is the Delhi-based foreign correspondent for Swiss daily Le Courier)