Washington, April 21
Worried over the spurt in cross border transactions and tax evasion, India has pressed for automatic exchange of information among the countries to deal with the menace.

"India believes that Automatic Exchange of Information is one of the most effective ways to improve voluntary tax compliance and decrease tax evasion and there is a need to make it obligatory," Finance Minister Pranab Mukherjee said at the meeting of G20 Ministers.

The G20 nations, a grouping of rich and developing countries, he said, should impress upon tax havens and those believing in banking secrecy not to give such exemptions that neutralise the efficacy of global Convention on tax matters.

The Multilateral Convention on Mutual Administrative Assistance provides member countries mutual administrative assistance in tax matters. "To make the Convention really effective, the G-20 should give a call that the Convention is signed by Offshore Financial Centres and countries traditionally believing in secrecy of bank laws and that country should not give exemptions which will eclipse the efficacy of the Convention," Mukherjee said.

Speaking at the Financial Action Task Force (FATF) Ministerial meeting here, Mukherjee called for a transparent financial system and said no country can alone meet the threats of money laundering and terrorist financing.

"There is an ever growing need for international cooperation to deal with these threats... We hope the new standards will improve the domestic and international cooperation amongst the agencies to combat these crimes," he said.

Mukherjee also called for a system that would prevent and detect the misuse of formal and informal channels and also to determine the beneficial owners. — PTI