The latest news reports from India indicate that officials from the Inland Revenue Authority of Singapore (IRAS) and India’s Central Board of Direct Taxes (CBDT) and Income Tax Department have met over the last two days. In the following week, all parties will share information on suspected tax evaders as well as cases where black money is suspected to be siphoned to India through Singapore’s banking and financial institutions.
Singapore Company Registration specialist Rikvin is optimistic that the move will strengthen trust and bilateral financial enforcement cooperation between Singapore and India.
The high-level meeting comes on the back of Singapore’s Prime Minister Lee Hsien Loong’s visit to India early this month. During the visit, he expressed dismay to his counterpart PM Manmohan Singh as Singapore has been cited as a “tax haven” in the Indian Ministry of Finance’s recently published “White Paper on Black Money.”
The Paper had described Singapore as a jurisdiction where “investments are routed for avoidance of taxes and/or for concealing the identities of ultimate investors from the revenue authorities, many of whom could actually be Indian residents who have invested in their own companies, through a process known as round tripping.”
The government agencies from both countries are also expected to discuss specific cases of tax evasion and money laundering as well as to exchange information on the progress made in such investigations.
Policies championed by the Organisation for Economic Cooperation and Development (OECD) and the Financial Action Task Force (FATF), as well as the revised enforcement provisions under the Code of Corporate Governance issued by Monetary Authority of Singapore (MAS), will also be discussed.
The revised code by MAS incorporates key changes in the areas of director independence, board composition, director training, multiple directorships, alternate directors, remuneration practices and disclosures, risk management, as well as shareholder rights and roles. It will take effect with respect to annual reports relating to the financial year commencing on November 1, 2012.
“Singapore already has very stringent regulations for corporate governance, ensuring that enterprises that have opted to start a Singapore company are bonafide and not just shell companies formed to function as conduits for black money. Firms that are established here must also add value to the economy by generating meaningful employment for Singaporeans,” said Mr. Satish Bakhda, Rikvin’s Head of Operations. “Come November, the revised code would require more out of Singapore companies in a bid to protect investors’ interest. Hence, we anticipate that Singapore’s continual efforts to foster an environment of trust will generate greater interest among foreign entrepreneurs to form a Singapore company.”
To carry forward the work on corporate governance, an inter-agency committee, the Corporate Governance Committee (CGC), with representatives from MAS, Singapore Exchange Limited, and Singapore’s Accounting and Corporate Regulatory Authority (ACRA) will issue a practical guide on risk governance for board members.