The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi has approved anAgreement between the Republic of India and Saint Vincent and The Grenadines for the Exchange of Information and Assistance in Collection with respect to Taxes.
Why is it important?
The agreement between India and Saint Vincent and The Grenadines will help in facilitating the exchange of information between the two countries including sharing of information held by the banks and other financial institutions encompassing the information regarding the legal and beneficial ownership. It will assist in the collection of the tax claims between the two countries. It will strengthen India’s commitment to fighting offshore tax evasion and tax avoidance practices leading to the generation of unaccounted black money.
What are the details of the agreement?
i) This is a new Agreement between the Republic of India and Saint Vincent and The Grenadines. There was no such agreement in past between the two countries.
ii) Agreement mainly proposes to facilitate exchange of information between the two countries and to provide assistance to each other in collection of tax claims.
iii) Agreement also contains tax examination abroad provisions which provide that a country may allow the representatives of the other country to enter its territory (to the extent permitted under its domestic laws) to interview individuals and examine records for tax purposes.
What is a Impact of this agreement?
Agreement between the Republic of India and Saint Vincent and The Grenadines will help in facilitating the exchange of information between the two countries including sharing of information held by the banks and other financial institutions encompassing the information regarding the legal and beneficial ownership. It will also facilitate the assistance in collection of the tax claims between the two countries. Thus, it will strengthen India’s commitment to fight offshore tax evasion and tax avoidance practices leading to generation of unaccounted black money.
Background of this agreement:
There was no such agreement with Saint Vincent and The Grenadines in the past and India was negotiating this agreement since a long time. Finally, Saint Vincent and The Grenadines agreed to conclude this agreement with India which will promote tax cooperation between the two countries through exchange of information and assistance in collection of outstanding tax claims between the two countries.
Where is Saint Vincent and The Grenadines?
According to The Commonwealth, St Vincent and The Grenadines is made up of the island of St Vincent and the northern Grenadines, a group of 32 smaller islands and cays (low banks of coral or rock) to the south. It lies in the eastern Caribbean Sea. The southern Grenadines are part of Grenada. St Vincent and The Grenadines is volcanic and had a population of 110,000 in 2018. The country has an area of 390 square kilometres and Kingstown is its capital. It joined the Commonwealth in 1979 after it got independence from Britain.
La Soufriere, which is the highest point in the country at 1,234 metres on the island of Saint Vincent, is also an active volcano and last erupted in 1979.
The European Union calls the poorest country in the Eastern Caribbean and says that it suffers from high unemployment, especially among women and young people. Its major economic activities are tourism and agriculture, primarily banana production.