India's avidity for exchange of information
In this era of digitalisation where the world has become a global village and distances are no longer a challenge, flow of capital has become easier and faster. Albeit, this globalisation fuelled by technological advancement has led to seamless transfer of goods, services, money and man, the same has also stimulated international tax evasion and avoidance, in particular through tax havens and non-co-operative jurisdictions.
Where the world has recently witnessed the illegitimate stashing of money in foreign jurisdictions and banking scandals, co-operation between tax administrations of different sovereigns has been considered to be critical in this fight against tax-evasion and in protecting the integrity of tax systems.
A key aspect of such co-operation shall be the effective and seamless exchange ofinformation ('EOI'), between the jurisdictions, to curb the practice of tax evasion followed by taxpayers around world.
The 1998 OECD report 'Harmful Tax Competition: An Emerging Global Issue'1 identified the lack of effective exchange information as one of the key characteristics of harmful tax practices and recommended member countries to remove impediments to the access of bank information.