Last update: Wed, 10 Feb 2016 03am

Access to accounts: petitions by banks dismissed

The Lahore High Court here on Thursday allowed Federal Board of Revenue (FBR) to have direct access to any person's account in any bank across the country and dismissed petitions filed by various banks. The banks, through their counsel, stated that FBR's direct access to accounts of citizens would create problems and risks in financial matters; and it will also militate the fundamental rights of citizens.

The counsel for FBR, Ilyas Khan, told the court that the federal government had already authorised the FBR to have access to any bank account. The court after hearing both sides, allowed the FBR to examine all accounts through internet directly.

Last year, the federal government passed Finance Bill 2013-2014 and gave FBR authority to have online and direct access to banks accounts in order to bring up to 0.5 million potential tax evaders in the tax base. The government, through the bill, also made it clear that the information about Rs 01 million plus deposits of account holders, writing off of loans exceeding Rs 01 million in a year and suspicious transactions would be sought from banks.

The bill stated that FBR can also have online access to the banks' central database containing details of its account holders and all transactions made in their accounts, including a list containing particulars of deposits aggregating Rs 01 million or more made during the preceding calendar month, a list of payments made by any person against bills raised in respect of a credit card issued to that person, aggregating to Rs100,000 or more during the preceding calendar month, a consolidated list of loans written off exceeding Rs1 million during a calendar year and a copy of each Currency Transactions Report and Suspicious Transactions Report generated and submitted by it to the Financial Monitoring Unit. Each banking company was directed to nominate a senior officer at the head office to co-ordinate with the Board for provision of any information and documents.

The banking companies and their officers would not be liable to any civil, criminal or disciplinary proceedings against them for furnishing information required under this Ordinance. All information received under this section would be used only for tax purposes and kept confidential. FBR, the bill said, could also such data in many parts of the world especially in OECD countries and proposed it in Finance Bill 2013 with the idea to broaden the tax base.

Copyright Business Recorder, 2015