ISLAMABAD: The government decided to give access to Federal Board of Revenue’s (FBR) inland revenue database to curb money laundering and terror financing in compliance with the action plan of the Financial Action Task Force (FATF).
According to media, the government has introduced a policy to provide the unit access to the FBR’s inland revenue database through mutual consultation with the stakeholders. The policy has been drafted and is expected to be finalised by the end of this month.
During a meeting of the FATF coordination committee, the FBR was given the target finalise the proposals from the relevant stakeholders by the end of October 2018 which had to be implemented in January 2020. Sources said banks had started the information was passed on to the departments concerned including the financial monitoring unit on a case-by-case basis if a suspicious transaction related to money laundering or terrorism financing was detected.
However, the unit could not access the FBR inland revenue database directly because of some legal hurdles.
Under Section 216 of the Income Tax Ordinance 2001, the FBR was not allowed to disclose information of taxpayers, including wealth statements, returns or accounts, any evidence, affidavit or deposition made in the course of any proceeding, and any record of assessment proceeding related to tax recovery. However, this information can be shared with the unit.
A presidential ordinance was promulgated this month to allow information-sharing with the financial monitoring unit. The ordinance will now be approved by parliament. The Senate Standing Committee on Finance has already given the nod to the changes.
The punishments and fines are due to increase for the elements involved in terrorism financing and money laundering according to the proposed amendments in the tax laws.
Similarly, a separate body has been proposed to punish the elements involved in money laundering and terrorism financing. For this purpose, a draft of rules has been introduced that would be implemented soon.
Law enforcement agencies are being authorised to investigate and prosecute in cases of money laundering and terrorism financing. In addition, the plan to increase the capacity of financial monitoring unit is in an advanced stage.
