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India Reaffirms Commitment to Global Tax Transparency at OECD Forum

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  Published in Business and Finance on Tuesday, December 2nd 2025 at 6:47 GMT by RepublicWorld

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India’s Commitment to Global Tax Transparency Reaffirmed at OECD Forum in New Delhi

In a spirited address that echoed through the halls of the World Trade Organization headquarters in New Delhi, Finance Minister Nirmala Sitharaman underscored India’s resolve to deepen tax transparency and align its domestic reforms with the latest global standards. The remarks came amid the 27‑28 March 2023 OECD/G20 tax policy forum, a high‑level gathering of the world’s largest economies that had the world’s attention on how countries are tackling tax avoidance, digital‑era challenges and cross‑border revenue disputes.

The Forum and Its Stakes

The OECD (Organisation for Economic Co‑operation and Development) and G20 brought together heads of state, finance ministers and tax experts from 190‑plus economies to review the “Base‑Erosion and Profit‑Shifting” (BEPS) agenda, digital tax, the common reporting standard (CRS) and other mechanisms that are reshaping the global tax landscape. India, as one of the top five emerging markets and the world’s most populous country, had a key stake in ensuring that the new rules are both fair and enforceable.

For its part, the Indian government has invested heavily in digitalisation and regulatory reforms over the past decade, but critics argue that the tax system still lags behind its peers in data exchange, enforcement and clarity. The OECD forum presented a rare opportunity to showcase the country’s strides and to reassure partners that India is not only a participant but a serious partner in global tax governance.

Key Themes of Sitharaman’s Address

1. Full Compliance with CRS and Automatic Exchange of Information (AEOI)

Sitharaman highlighted that India has ratified the CRS and is now fully implementing AEOI. “We are in the process of expanding the scope of participating financial institutions and ensuring that the data flows smoothly to the tax authorities,” she said. The minister noted that the government is also working to enhance data quality, with improved digital tools that will help reduce errors and administrative burdens.

2. Digital Tax and E‑Commerce Regulation

India’s “Digital Services Tax” (DST), introduced in 2019, was reaffirmed as a key pillar of its strategy to capture revenue from cross‑border digital services. Sitharaman pointed out that the DST is now being phased out in favour of a comprehensive “Digital Economy Act” that will set out clear thresholds, tax rates and filing procedures. She also announced the introduction of an electronic filing system for digital platform operators, a move designed to cut compliance costs and increase transparency.

3. Enhanced Transfer‑Pricing Enforcement

The minister underscored that the transfer‑pricing regime has been strengthened through the introduction of the “Transfer‑Pricing Management System” (TPMS), which now allows the Income Tax Department to receive, cross‑check and verify data automatically from multinational enterprises. “With TPMS, we are reducing the room for manipulation and ensuring that profits are taxed where the economic activity takes place,” she said.

4. Co‑ordination with International Bodies

India reiterated its partnership with the OECD’s “Revenue Integrity Unit” and its collaboration with the G20 “Action Plan on Tax Transparency and Administration”. Sitharaman highlighted that India’s “Project “Shilpa””, an inter‑departmental initiative, is already working to align India’s tax codes with BEPS Action Plans 8 and 9. She also mentioned the launch of a joint working group with the United States to harmonise the application of the OECD’s Digital Services Tax.

5. Addressing the “Fairness Gap”

One of the most debated issues at the forum was the perceived “fairness gap” in tax systems of emerging economies. Sitharaman acknowledged that India must still work on simplifying tax structures to meet the G20 commitments. She promised a “Roadmap for 2025” that will include a flat corporate tax rate and a simplified GST structure for small businesses. “We aim to create an environment where domestic and foreign investors feel secure that they are taxed fairly, not excessively,” she said.

Contextual Highlights From Follow‑Up Links

A series of links in the original Republic World article pointed to several key resources:

• OECD’s “BEPS Action Plan” documents – These provide the technical framework for the measures India has adopted, such as the “Country‑by‑Country Reporting” requirement. They illustrate India’s alignment with Action Plan 13, which deals with the taxation of digital economy services.

• India’s Ministry of Finance Press Release on the Digital Economy Act – The act is slated to be enacted in 2024 and includes provisions for digital service providers to file an annual digital services tax return electronically. The link gives the official wording of the act and a timeline for implementation.

• G20 Working Group on Tax Transparency – The website outlines the joint commitments made during the G20 summit in June 2023, including India’s pledge to adopt a simplified corporate tax regime and to harmonise tax incentives for foreign direct investment (FDI).

• India’s CRS implementation report (2023) – A detailed report from the Ministry of Finance on the progress of CRS implementation, including data on the number of financial institutions participating and the volume of data exchanged.

These resources underscore the depth of India’s commitment and provide readers with the necessary background to appreciate the scale of reforms being undertaken.

What It Means for Businesses and Investors

India’s statements signal a clear shift toward a more open, data‑driven tax regime. For multinational corporations (MNCs) and digital platforms, the forthcoming Digital Economy Act will clarify tax obligations and reduce the administrative cost of compliance. The improved CRS and AEOI framework ensures that foreign investors will see their financial data handled with greater security, while the transfer‑pricing enhancements reduce the risk of audit disputes.

For small and medium enterprises (SMEs), the promised simplification of GST and corporate tax structures could lower entry barriers, allowing more businesses to thrive and contribute to a more vibrant economy. Investors, both domestic and foreign, can anticipate more predictable tax policy, which is a critical factor in their investment decisions.

Looking Ahead

While the address was largely positive, critics in the Indian parliament and from industry groups urged the government to expedite the reforms and to focus on enforcement rather than just the formal adoption of international standards. Sitharaman acknowledged these concerns and promised to accelerate the rollout of the Digital Economy Act, the TPMS, and the CRS data quality improvement program.

In closing, Finance Minister Nirmala Sitharaman summed up the message that resonated throughout the forum: “India is not merely a recipient of international tax reforms; we are an active contributor, a responsible player that will continue to improve our tax system for the benefit of all stakeholders.” Her remarks will no doubt be a reference point for future tax policy discussions in India and beyond.