Union Cabinet, chaired by Prime Minister Narendra Modi on Wednesday approved an agreement between 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?
• This is a new agreement between India and Saint Vincent and The Grenadines and there was no such agreement in the past between the two countries.
• The agreement mainly proposes to facilitate the exchange of information between the two countries and to provide assistance to each other in the collection of tax claims.
• The agreement also contains tax examination abroad provisions that 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.
How is there an agreement now?
There was no such agreement with Saint Vincent and The Grenadines in the past and India was negotiating this agreement for 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 the exchange of information and assistance in the 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.