Weak Institutions Fuel Illegal Money Flow in Developing Nations
Weak institutions are contributing to the illegal flow of money in developing countries. Experts at a recent event emphasized the need for robust infrastructure and reforms in taxation and multilateral institutions. A proposed global wealth tax aims to address these challenges collectively.
- Country:
- India
Weak institutions are at the core of the illegal money flow problem faced by many developing countries, according to a senior official speaking on Monday.
In his address, Dammu Ravi, Secretary from the Ministry of External Affairs, emphasized the importance of reducing reliance on hard currencies to curtail these financial issues. He highlighted the need for strengthening the taxation structure and suggested that countries in the Global South should enhance their digital public infrastructure to counteract illegal money movements.
Ravi referenced Brazil's idea of a two percent wealth tax on dollar billionaires as a crucial collective step needed globally. Joining the conversation, NIPFP Director R Kavita Rao argued that alongside strong taxation policies, robust institutional frameworks are essential to combat these illegal financial flows effectively.
(With inputs from agencies.)