ISLAMABAD: The Federal Board of Revenue (FBR) has submitted a detailed report in the Supreme Court about the Pakistanis who have stashed their wealth abroad. The board also informed the court about legal obstacles in bringing the money back to Pakistan.
According to the report submitted in Supreme Court, the FBR stated that it has been successful in collecting CNICs of all the 38 individuals identified in Paradise Leaks. The data is being utilized by field formations for further investigations. The court was also informed that the FBR had requested the Securities and Exchange Commission of Pakistan (SECP) to provide it the copies of memorandums, articles and financial statements of local companies in which these individuals were directors or shareholders. The FBR also requested the State Bank of Pakistan (SBP) and Financial Monitoring Units (FMU) to obtain details of bank accounts and other financial record of these individuals while the FBR requested the Federal Investigation Agency (FIA) to obtain travel history of the Pakistani nationals named in Paradise Leaks.
A list of 100 Pakistani individual, who have allegedly purchased properties in Dubai/UAE, was received in the FBR from the Director, Economic Crimes Wing. Federal Investigation Agency (HQ) which was forwarded to the Head of EOI Unit, Ministry of Finance, UAE by the Board on 16.11.2017. The UAE tax authorities through two letters on January 22, 2018 and January 28, 2018, provided the details of 55 transactions of properties made by Pakistani individuals and the copies of 32 passports. Out of these 32 cases, CNIC in 31 cases (Annex-IX) are available. 29 out of these 31 individuals are registered with FBR, stated in the report.
As per that data available with FBR, most of these 29 individuals are regular filers of their income tax returns. 27 have filed last five completed tax years returns. All 29 of them have filed at least 7 out of last 10 completed tax years returns and most have filed all 10. The information has been passed on to concerned field formations to ensure the filing of any missing returns from last five completed tax years and also to check whether purchased properties have been declared by the taxpayers in their returns. Two unregistered individuals have also been registered, whereas directions have been issued to field formations to take action, where appropriate and issue notices to all individuals as warranted under the law, stated in FBR report.
In the end concern authorities stated that FBR has proceeded to investigate the cases of individuals reported in Panama and other leaks professionally and with sincerity of purpose, to realize the lost revenue. However optimum outcome/results could not be achieved.
The main reasons have been on two counts. First, being limitations provided in the domestic tax statute, primarily on account of prescribed time limitation to amend/reopen a completed assessment and absence of mandatory disclosure requirements of Pakistani residents in respect of their foreign assets and income.
Second, legal framework mechanism binding foreign jurisdictions to exchange information with Pakistan was also not available. Whereas the first limitation require amendments in the domestic law and may be included in the forthcoming Finance Act, the second limitation, however, has been catered for through signing of various multilateral tax conventions, agreements and updating articles on exchange of Information in existing tax treaties, though with prospective effect.
