FM Nirmala Sitharaman Urges Global Cooperation on Tax Transparency Amid Digitalisation

Finance Minister Nirmala Sitharaman emphasised the need for global cooperation in tax transparency as economies become increasingly digitalised. Speaking at the 18th Global Forum Plenary meeting, she highlighted the importance of timely exchange of information among jurisdictions.

The minister stressed that fairness, confidentiality, and cybersecurity must remain central to tax systems. She also called for leveraging technology and artificial intelligence to improve compliance and outcomes.

Global Forum and Its Role

The Global Forum on Transparency and Exchange of Information for Tax Purposes is a multilateral body comprising 170 jurisdictions. It monitors and reviews the implementation of international standards on transparency and information exchange.

Sitharaman noted that the forum plays a critical role in developing standards and supporting countries in addressing tax-related challenges. She urged members to deepen existing standards and ensure that exchanged information translates into measurable results.

Challenges from Digitalisation and New Financial Products

The minister pointed out that digitalisation and the emergence of new financial products have created complex challenges for tax authorities worldwide. Evolving structures of beneficial ownership and cross-border transactions demand coordinated efforts.

Sitharaman said these issues cannot be addressed by any single country and require trust, cooperation, and timely sharing of relevant data. She stressed that transparency must be guided by clear rules and mutual respect.

Technology and AI in Tax Compliance

Sitharaman highlighted the role of technological tools, including artificial intelligence, in analysing tax information efficiently. She said India has integrated exchanged information with broader compliance and risk assessments over the past decade.

While innovation offers opportunities, she cautioned that accountability and respect for procedure are essential. “Innovation must always walk hand in hand with accountability,” she said, adding that this balance strengthens credibility in tax systems.

Read More: FM Nirmala Sitharaman says Talks with RBI and Banks are Underway to Build Larger, Stronger Banks.

Conclusion

The Finance Minister’s remarks underscore the growing importance of global cooperation in tax transparency amid rapid digitalisation. By combining technology with sound judgement, countries can enhance compliance and fairness in tax systems. The Global Forum’s role in setting standards and fostering trust remains vital. Sitharaman reiterated that lawful economic activity must be encouraged while tax evasion is firmly discouraged.

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