ISLAMABAD: The Federal Board of Revenue (FBR) has said that it has no objection on the newly proposed Protection of Economic Reforms Bill 2016, however, State Bank of Pakistan (SBP) has expressed reservations on the said bill declaring no new bill is required in the presence of fully functional and operational Financial Monitoring Unit (FMU).
Chairman Senate Standing Committee Salim Mandviwala has moved this new bill in recent days in a bid to place tighter checks on cash flow into and out of the country. Dissatisfied with the tax immunity foreign currency account (FCA) holders enjoy under the 1992 Economic Reforms Act (PERA) by the Nawaz Sharif government, he introduced the new Bill to put an end to the flight of billions of dollars that have unpaid taxes on them. The State Bank of Pakistan does not support the Senator’s proposal, despite being the entity to report the gargantuan figures that are transferred into FCAs outside of Pakistan.
Explaining the position of FBR on the said bill before the Senate Standing Committee on Finance and Revenue Chairman Nisar Muhammad Khan said that FBR had no objection on the presentation and discussion on the said bill in the committee meeting. “FBR has nothing to do with the function of the monitoring of cash flow inside or outside the country as tax authority has mandate to check payment of deduction of taxes in due quantity from the said funds’ transactions” he added.
Moreover, Nisar Muhammad Khan went on saying that FBR desired to have more and more effective and strict monitoring check on funds transactions in and out of the country so that more and more revenue could be collected from them and deposited to the national kitty.
However, representatives of the State Bank of Pakistan were of the view that SBP did not support said bill. They informed the committee that there were 0.535 million foreign accounts holders in the country and FMU had traced out 48,000 suspected transactions, however, there existed no record of taxpayers out of foreign accounts holders. Committee directed the SBP to provide access to FBR to the foreign bank accounts holders’ data to enable the authority to charge due amount of tax.
