Income tax returns and wealth statements: FMU will have access to taxpayers' information

The Financial Monitoring Unit would have access to the taxpayer's personal information of income tax returns and wealth statements, available with the Federal Board of Revenue (FBR), for performing functions under Anti-Money Laundering Act, 2010.

The government has amended Section 216 of the Income Tax Ordinance through recently promulgated Tax Laws (Second Amendment) Ordinance, 2019, enabling sharing of information between the FBR and the FMU.

According to the FBR, the Financial Monitoring Unit is the central agency in Pakistan responsible for receiving and analyzing 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.

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 in force. Requisite amendment has been made in order to enable sharing of information between FBR and FMU in order to facilitate FMU to perform its functions as laid down in the Anti-Money Laundering Act, 2010 and to enable compliance with FATF regulations.

A tax expert explained that the section 216 of ITO states that all information entrusted to public servants shall be confidential. However, subsection (3) provides certain instances wherein, or persons to whom disclosure of the information may be made. The Ordinance has added a sub clause (s) to subsection (3), whereby, disclosure of information, to the Financial Monitoring Unit for the purpose of performing functions as laid down in the Anti-Money Laundering Act, 2010, has been allowed.