Swiss financial system pays Rs 1-lakh crore tax a year
They are accused of helping Indians and others evade tax and hide their black money, but the Swiss financial sector itself pays taxes totalling about Rs one lakh crore every year to its government.
New Delhi: They are accused of helping Indians and others evade tax and hide their black money, but the Swiss financial sector itself pays taxes totalling about Rs one lakh crore every year to its government.
In its latest report on "The Economic Significance of Swiss Financial Centre," the Swiss banks' apex body Swiss Bankers Association (SBA) today said that financial sector is a major contributor to Switzerland's tax earnings and economy.
"The Swiss financial centre, with banking as the leading sector, is of major international importance and among the global market leaders in many areas," SBA said.
Detailing the importance of Swiss banks in various aspects of the economy, SBA said: "The financial centre (including staff and shareholders) pays an estimated CHF (Swiss Francs) 14-18 billion(Rs 75,000-1,00,000 crore) each year overall in direct and indirect taxes".
The figure corresponds to nearly 12.5 percent of the entire tax collection of central government in India during the last fiscal at about Rs 7,92,000 crore from all sources including individuals and companies across all the sectors.
Accused of providing safe haven to untaxed money from across the world, Swiss banks have been under pressure from various countries, including India, for last few years amid a raging debate on the issue of black money.
While numerous unverified estimates, some running into lakhs of crores of rupees, have surfaced about the quantum of black money stashed in Swiss banks by Indians, there is no official version for these amounts. The government has set up a committee to make an estimate of the black money.
Swiss banks have been often alleged to be among the biggest hoarders of black money from India and also of being reluctant in sharing information with foreign countries in this regard.
The process of revising a tax treaty between India and Switzerland is currently on and this would help expand the scope of sharing information about black money between the two countries.
However, Swiss banks have always maintained that they would not allow any 'fishing expedition' or bulk information request from any country, including India and the information would be shared only after getting specific inputs on individual cases.
In its latest report, SBA said that the tax paid by the banking sector alone was estimated at about CHF 11.2 billion (over Rs 60,000 crore), which was nearly 10 percent of all tax receipts of the Swiss government last year.
The report went on to say that Swiss banks were hugely important to the Swiss economy in many respects, including jobs, taxes and value creation.