Finance Minister Nirmala Sitharaman has called for enhanced global cooperation to tackle tax challenges arising from the digitalization of economies and new financial products. She stressed that maintaining fairness and public trust in tax systems worldwide requires timely information exchange and joint efforts.
Addressing New Challenges with Technology and Cooperation
Speaking at the 18th Global Forum Plenary meeting on Tuesday, Sitharaman outlined the dual nature of modern challenges. She pointed to the digitalization of the economy, the emergence of novel financial products, and evolving structures of beneficial ownership as areas needing urgent, coordinated action. "These are not challenges that any one country can address alone. They demand coordination, trust and timely exchange of relevant information," the minister asserted.
She highlighted that the role of the Global Forum on Transparency and Exchange of Information for Tax Purposes is more critical than ever. This multilateral framework, which includes 170 jurisdictions, monitors the implementation of international standards. Sitharaman stated that transparency achieves effectiveness and fairness when guided by clear rules, mutual respect, and shared objectives.
Leveraging AI and Ensuring Measurable Outcomes
A key part of her address focused on the role of technology. Sitharaman advocated for the use of technological tools like artificial intelligence (AI) alongside human judgment. The goal is to ensure that the vast amounts of tax information exchanged between countries lead to tangible, measurable outcomes.
"Innovation must always walk hand in hand with accountability. It is that balance which gives systems strength and credibility," she remarked. While AI offers opportunities to process information efficiently, she cautioned that the key lies in "judgement, responsibility and a respect for procedure." The minister also underscored the paramount importance of maintaining confidentiality and cybersecurity in all exchanges.
India's Experience and the Path Forward
Drawing from India's domestic experience, Sitharaman noted that voluntary tax compliance has strengthened over the last decade. She attributed this improvement to enhanced fairness and predictability within the tax system. India has been proactively integrating exchanged information with broader analyses of compliance and risk.
Looking ahead, the Finance Minister outlined the collective task for the Global Forum community. "Our collective task is to deepen current standards where necessary and, to ensure that exchanged information translates into measurable outcomes," she said. The ultimate focus, she concluded, must remain on fairness, sustainability, and public trust in the integrity of tax systems worldwide, uniting all jurisdictions in the shared purpose of encouraging lawful economic activity and discouraging evasion.
