Offshore wealth held by Indians in tax havens have risen nearly 90 per cent since 2007 to $62.9 billion, about 3.1 per cent of the country's GDP, in 2015. The data released by Basel-based Bank of International Settlements (BIS) on bilateral foreign holdings, also revealed that Switzerland is no longer the preferred destination. Over 53 per cent of the Indian wealth is now held in Asian tax havens like Hong Kong, Macau, Singapore, Bahrain, and Malaysia.
The Swiss now holds only 31 per cent of Indian wealth, down from the known 58 per cent in 2007. The new estimates hint that the Indian government's much-publicised fight against hoarding of black money in foreign banks is not serving much purpose. Economist Gabriel Zucman of UCLA and his colleagues Annette Alstadster of the Norwegian University of Life Sciences and Niels Johannesen of the University of Copenhagen calculated that total offshore wealth in the world was $8.6 trillion, about 11.6 per cent of world GDP.
“Among countries with a large stock of offshore assets, one finds autocracies (Saudi Arabia and Russia), countries with a recent history of autocratic rule (Argentina and Greece), alongside old democracies (United Kingdom and France). Among those with the lowest stock of offshore assets, one finds relatively low-tax countries (Korea and Japan) alongside the world's highest tax countries (Denmark, Norway),” they said.
There is wide disparity among the countries in terms of what share of their GDPs is secreted away in offshore tax havens. From just a few per cent of their GDP in Scandinavian countries, the wealth rises to 15% in Continental Europe, and to as much as 60% in Russia, Gulf states, and a number of Latin American countries. China has about $287 billion offshore wealth, which is 2.4% of their 2015 GDP. Analysts say the reason these variation exists cannot be easily explained by tax rates or institutional factors.
