ISLAMABAD: Federal Board of Revenue (FBR) is now authorized to share asset declaration information of taxpayers with the financial monitoring unit of finance ministry to help curb anti-money laundering.
Sources in the FBR said tax officials were previously barred from disclosing taxpayers’ details to the authorities except for some conditions. However, a presidential ordinance was promulgated with effect from January 1, 2020 to allow information-sharing with the financial monitoring unit (FMU).
The sources said the tax officials were not allowed, under a section (216 of Income Tax Ordinance 2001), to disclose information of taxpayers, including wealth statement, returns or accounts, any revealed evidence, affidavit or deposition made in the course of any proceeding, and any record of assessment proceeding related to tax recovery. However, now tax officials are authorised to share such information with the FMU.
The FMU, an arm of the ministry of finance, has been established to fight against money laundering and terrorist financing. The measures are taken to check money laundering and counter terrorist financing.
However, certain exceptions to this general prohibition are also included in the section whereby information might be disclosed to specified individuals, organisations or authorities. By way of an amendment made through the Tax Laws (Second Amendment) Ordinance, 2019, the FMU established under the Anti-Money Laundering Act 2010, has been included in the list of such exceptions, which do not fall within the ambit of confidentiality clause contained in the section 216.
“This amendment is intended to enable FMU to better implement anti-money laundering procedures by directly obtaining necessary information from public servants,” AF Ferguson said in a report. The FBR said the amendment was made to make compliance with the conditions of Financial Action Task Force (FATF). Global finance system watchdog FATF would decide next month the fate of the country about whether or not to keep it in greylist of countries with deficiencies in controlling money laundering and terrorist financing. The FBR said the FMU is the central agency in Pakistan responsible for receiving and analysing suspicious transaction reports and disseminating the same to the relevant authorities for further investigation or regulatory action in respect of cases relating to money laundering and terrorist financing.
The FBR said the section 216 of the Income Tax Ordinance, 2001 accords confidentiality to tax records and proceedings and has overriding effect over all other laws for the time being.
Requisite amendment has been made through the latest presidential order to enable information-sharing from FBR to FMU to let the unit perform its functions as laid down in the Anti-Money Laundering Act, 2010 and enable compliance with FATF regulations, the FBR said.
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