ISLAMABAD: The government on Monday implemented the much awaited Benami Act – in line with its efforts to document the economy allowing tax officials to confiscate whole properties, expensive vehicles and bank accounts registered with fictitious individuals.
According to media, FBR Member Inland Revenue (IR) Policy Dr Hamid Ateeq Sarwar said that in the first phase three approving authority will be established in three cities (Islamabad, Lahore and Karachi) with clear jurisdiction. The jurisdiction of these authorities will be notified in a day or two, the official added.
The confiscation will involve all kinds of immovable and movable assets registered with fictitious individuals in order to avoid taxes. The implementation of the law will now come into effect after a delay of more than two years.
The term ‘benami’ refers to the practice of holding property/assets in the name of one person for the benefit of another. However, benami is often aimed at concealing ownership of assets acquired through illegal means, defrauding creditors, and/or evading payments of government fees, charges or taxes.
Under the rules, the government has also announced hefty cash rewards for the whistle-blowers of the benami movable and immovable assets.
The legislation was made through an act of parliament in Jan 2017 – Benami Transactions (Prohibition) Act, 2017 – but was put on the back burner owing to delay in finalisation of rules. On Monday, the FBR has notified the rules through a notification SRO326 of 2019.
Under the Act, the commissioner of income tax will exercise the powers and perform the function of authority. Initially, the officers designated will investigate the available data to identify benami assets. “We will provide these offices data of property transactions and mapping of plazas in the first phase,” the tax officer said.
In the first instance, the officer will issue a notice for attachment of the benami assets for a period of 90 days. During this period, the tax officer will investigate the case to make an FIR following identification of benami property or bank accounts etc. The FIR will then be referred to the adjudicating authority.
“The law is meant for creating deterrence, not to generate revenue,” Mr Sarwar said. Asked whether government will provide amnesty to individuals who registered their assets in fictitious person’s name before the enactment of law, he said he was unaware of any such decision at the moment.
The government has also announced cash awards for whistleblowers in detection of benami property. Three slabs of cash award have been notified. However, the amount of rewards will be sanctioned after confiscation of the benami property.
