Thursday, October 21, 2021

Cabinet approves Tax Information Exchange Agreement between India and St. Vincent and the Grenadines

The Union Cabinet, chaired by Prime Minister Narendra Modi has approved an Agreement between India and Saint Vincent and The Grenadines for the Exchange of Information and Assistance in Collection with respect to Taxes.

Details of the Agreement

-This is a new Agreement between India and Saint Vincent and The Grenadines. There was no such agreement in the past between the two countries.
-The agreement mainly proposes to facilitate the exchange of information between both nations and to provide assistance to each other in the collection of tax claims.
-Agreement also includes rules for tax examination abroad which provide that a country may allow the representatives from another country to enter its territory (to the extent permitted under its domestic laws) to interview individuals and examine records for tax purposes.

Impact

Agreement between India and Saint Vincent and the Grenadines will help in facilitating the exchange of information between both nations including sharing of information held by the banks and other financial institutions encompassing the information regarding the legal and beneficial ownership.

It will also assist in the collection of the tax claims between the two countries. Thus, it will strengthen India’s commitment to fighting offshore tax evasion and tax avoidance practices that lead to the generation of unaccounted black money.

Background

There had previously been no such deal with Saint Vincent and the Grenadines, and India had been negotiating this agreement for a long time. Finally, Saint Vincent and the Grenadines decided to conclude this agreement with India that will boost tax cooperation between both nations through information sharing and assistance in the collection of outstanding tax claims.

India-Saint Vincent and the Grenadines relations

India and St. Vincent and the Grenadines have a long history of diplomatic and economic cultural relations since the mid-1980s. In 2013, India handed over a cash donation of US$500,000 towards assistance in recovery and rehabilitation in the wake of damages caused by floods. Earlier, in December 2010 also, India had made a cash donation of US$500,000 towards recovery and rehabilitation following Hurricane Tomas.

Saint Vincent and the Grenadines received a grant of US$1.9 million from the Indian-UN Development Partnership Fund for the Programme, Modernization of Arrowroot Industry for Climate Change Resilient and Sustainable Rural Livelihoods for Indigenous Communities.

The collaboration has also been extended in the field of training through short-term training courses for persons under the Indian Technical and Economic Cooperation (ITEC) for various programs. Both the countries are members of the Commonwealth and the L.69 Group of countries, respectively. L.69 is a political grouping with the UN System which seeks to promote reform of the UN Security Council.

High-level visits

Prime Minister of St. Vincent and the Grenadines, Dr. Ralph Gonsalves met Prime Minister Narendra Modi in 2015 in New York on the sidelines of the UNGA meeting. Both leaders held talks on developing bilateral relations between the two countries and expressed satisfaction at the traditionally close and cordial links that exist between both countries.

Dr. Ralph Gonsalves had a highly successful official visit to India in 2019. He noted the enormous goodwill for India in St. Vincent and Grenadines and also in the Caribbean and Latin American region. He praised India’s development cooperation with the region and for India’s prompt assistance subsequent to natural calamities.

About Indian Community

Around 3,000 persons of Indian origin came to St. Vincent and Grenadines as indentured labourers in the 19th century. Most of them have now assimilated into the mainstream local society and they have set up a Saint Vincent and Grenadines Indian Heritage Foundation. Due to the efforts of the Foundation, 1st June has been declared as Indian Arrival Day in the country whereas October 7 has been declared as Indian Heritage day.

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