ISLAMABAD: Pakistan is going to sign an agreement with Switzerland on March 21 on the exchange of information regarding bank accounts. Swiss authorities have agreed to provide information about Pakistani accounts in Swiss banks.
Several meetings were held with the Swiss authorities and now they have invited Pakistani officials to sign the agreement. The Swiss government demanded Islamabad to lessen taxes in order to have access to the information.
After making this convention operational, it will be impossible to keep tax evasion money in these countries. Under the agreement, the government will be able to get information about banks accounts operated by Pakistanis in Switzerland.
Finance Minister Ishaq Dar, in a policy statement in the National Assembly, said Pakistan had already signed the Multilateral Convention on Tax Matters with Organization for Economic Cooperation and Development (OECD) on September 14, 2016 which was going to be operationalized next year.
He said Pakistan is the 104th member of the Organization. He said after the operationalization of this convention, it will be impossible to keep tax evasion money in these countries.
Finance Minister Ishaq Dar in his May 14, 2014, statement had informed the National Assembly that at least $200 billion of Pakistani money was stashed away in Swiss banks. The minister had told the house in a written reply that the government was engaging with Swiss authorities to get to the money, hidden away by various Pakistani nationals.
Giving background, the minister said the process had started way back in 2013 when he had proposed to federal cabinet to allow the finance ministry to enter into a new agreement with Swiss authorities by revisiting the previous treaty of 2005 about minimum exchange of information.
He said initially the Swiss authorities had proposed strict conditions for such an agreement. But we continued deliberations with them that culminated in reaching an understanding for having an agreement.
He said over the period many media reports had surfaced that Pakistanis had $ 180 billion to $ 200 billion tax evaded money in Swiss banks and this situation called for approaching the Swiss government for a treaty of information exchange.
When he said the government approached the Swiss authorities they placed before us some strict conditions like reducing tax rates, giving them MFN status, reducing students’ accounts limit to $14500 from existing $18000.
But he explained that Pakistan continued persuading them not to go for such conditions as fleeing with tax evaded money had become a practice by certain people in Pakistan. This process continued over previous years though Pakistan had also been trying to become part of OECD and Pakistan became member of this organization in Sept 2016.
“Therefore after understanding that now Pakistan will automatically get this information, they have also offered us a new agreement and I shall be going there to sign this agreement on March 21 this year,” he added.
Dar said meanwhile our efforts continue for membership of the OECD and numerous of their groups visited Pakistan to evaluate our system whether it was properly tuned to get the information under the OECD convention.
He said in July 2016 Pakistan had become a largely complying country for this convention and was offered membership that we signed on September 14, 2016. “This instrument would be operational from next year as 90 members countries out of 104 have agreed to do so. Therefore the exchange of information process shall be starting from January 01, 2018.”
He said after this agreement Pakistan would be eligible to automatically get information about tax evaded money. He also appreciated the role of the parliament in all of this process and mentioned to passage of amendment in the money bill 2016 enabling Pakistan to become part of OECD and all other guidance and input in this regard.
