2009: Tax havens crack, banking secrecy sinks

The US has managed a peek into secret Swiss accounts to uncover tax havens or black money stashed there, while India has only got as far as round-table meetings to ask for its chance

A cash-starved global economy and determined political manoeuvring helped start uncover tax havens this year, but so far it is the US that has managed a peek into secret Swiss accounts while India only got as far as round-table meetings to ask for its chance, reports PTI.

The US-Swiss deal giving the Internal Revenue Service access to 4,450 secret accounts came after bitter wrangling that even put their bilateral ties in jeopardy. The deal created cracks in Switzerland\'s banking secrecy norms.

India too went to Switzerland hoping to chip away any loose concrete in the secrecy vault, but hasn\'t gone beyond round-table discussions in Geneva.

Tax havens are estimated to hold assets worth $11 trillion—more than twice the value of stimulus measures announced globally to combat the global financial crisis—and united leaders of G-20 countries in the quest to get this money out. In April this year, the leaders pledged to crack down on tax havens.

In India, black money, particularly the amounts stashed away in foreign accounts, became a poll issue with the Bharatiya Janata Party (BJP) and the Left parties estimating that Indians have squirreled away assets worth up to $1.50 trillion in tax havens. However, the government told the Supreme Court, which is hearing a petition on black money, that there were no authentic figures available on this count.

Way back in 1999, a book \'Black Economy in India\' by Jawaharlal Nehru University (JNU) Professor Arun Kumar estimated the quantum of black money at Rs4,87,185 crore, which was 40% of gross domestic product (GDP) at that time.

India plans to comprehensively revise tax treaties with as many as 25 nations, including Switzerland and Mauritius, and re-negotiate with 51 others, to trace black money.

With countries beginning to push their case for revealing of account details, the Organisation for Economic Cooperation and Development (OECD), which sets international tax norms, said the efforts against tax havens have seen tremendous progress.

A top OECD official said that so far this year, as many as 280 agreements have been signed between various countries bilaterally for exchange of information, especially those related to tax.

"This in itself shows the progress made by the OECD initiative. There has been tremendous progress (in cracking down on tax havens)," the OECD official told PTI from Paris.

The prominent among those countries which agreed for increased exchange of information with others are Switzerland, Singapore and Hong Kong.

"Last year, most of the offshore financial centres did not exchange tax information even though many had committed to do so. This year, we have seen the completion of hundreds of (bilateral) agreements," the official noted.


Revised rates to pinch hawkers and advertisers in Mumbai

Hawkers and advertisers will feel the pinch due to the increase of their monthly hoarding and hawking charges, as MCGM gears up to usher in a new tariff regime

Hawkers and advertisers will feel the pinch with the increase of their monthly hoarding and hawking charges as the Municipal Corporation of Greater Mumbai (MCGM), which is reeling under a financial crisis, is likely to implement revised rates, reports PTI.

According to MCGM, the monthly advertisement and hoarding charges are likely to be increased by nearly 50%. At present MCGM charges for hoardings, billboards, wall paintings, balloon ads and street furniture are Rs300 per square meter (sq m) per month. This will be hiked to Rs550 per sq m.

"The civic body will hike charges to be collected from hawkers and those putting up hoardings as well. The increase in charges of both advertisements and hoardings have been approved by the law committee," a civic official from the license department said.

"The hoarding fees have been passed by a general body meeting as well, but (the proposed increase in) hawking charges still awaits a nod," the official added.

MCGM's finance division has instructed all departments to cut down on expenditure and revise rates of civic services to tide over the financial crisis.

Charges for neon signs and electronic scrollers along with other outdoor media vehicles will be increased from Rs450 to Rs800. Cost for billboards on top of buildings, government buses, and electricity poles will be increased from Rs120 to Rs200.

Hawking fees for both roving and sitting hawkers have been doubled. For roving hawkers, the charges will be increased from Rs25 per sq m to Rs50 per sq m and for sitting hawkers from Rs90 per sq m to Rs180 per sq m.

The city has nearly 4.5 lakh hawkers of which around 15,000 are authorised to carry out their business. There are 2,300 different kinds of hoardings in the city.

"The civic body earns Rs61 crore from hoardings and after implementation of revised rates it is likely to earn another Rs35 crore," the official said.

The MCGM had revised the license fee for hawkers and hoarding fees for advertisers in 1997 and 2003, respectively.

"Every year there will be a 10% increase in both the charges," the official said.


TVS Motor will not hike prices next month

The prices for TVS Motor vehicles will not increase from next month. However, by April 2010, analysts believe that the consumer may have to spend more for TVS vehicles

India’s third largest two-wheeler maker TVS Motor Co Ltd has said that it is not going to increase prices despite rising steel costs. However, analysts believe that the company would increase prices from the next fiscal.

A senior official from TVS Motor said, “I don’t think that TVS Motors will increase the prices of its vehicles in January despite higher steel prices. However, the company may review prices in the next two-three months.”

Automakers are planning to go for price hikes in a phased manner—the first hike will be in January followed by another hike in April next year.

Analysts said that TVS Motor may not be affected by the current rise in steel prices because the company has contracts for steel supply till the first quarter of next year.

However, with the replacement of Bharat Stage Norms (BSN)-II by BSN-III in April 2010, the company may make the consumer spend more due to the improvement in its engines, the analyst said.

According to a PTI report, TVS Motor, which started exports of its three-wheelers a couple of months back, is also planning to venture into new markets like Bangladesh, Mexico, Peru and Guatemala.

"Our plan is to enter the diesel passenger market in the auto-rickshaw category of three-wheelers and we should be able to accomplish this within 18-24 months," HS Goindi, TVS Motor’s president for marketing told the media. The diesel three-wheeler will target the semi-urban and rural markets, he said, without disclosing details.

Mr Goindi said that the company had a presence in two-stroke and four-stroke engine segments in petrol, LPG and CNG variants.

According to data from the Society of Indian Automobile Manufacturers (SIAM), TVS Motor sold 11,36,344 units of two-wheelers in the domestic market in 2008-09.


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)