FBR investigating 400 major foreign bank accounts cases

The Federal Board of Revenue (FBR) is investigating 400 major foreign bank accounts cases, each having an amount of US $1 million or above, purportedly owned by Pakistani nationals abroad. This has been stated by Chief International Taxes FBR Muhammad Ashfaq Ahmad while giving detailed briefing on offshore assets to the National Assembly Standing Committee on Finance held at the FBR House on Thursday under the chairmanship of MNA Faiz Ullah.
The committee members were briefed by the FBR Chairman and FBR Chief (Policy) regarding Banami bank accounts transactions and undeclared overseas properties owned by Pakistanis. He informed that information about 152,518 bank accounts of Pakistan tax residents had been received from foreign jurisdictions. He added that received data had been analysed from taxation point of view and FBR was currently processing of overseas properties owned by Pakistanis in the UAE and United Kingdom. He also shared data of total offshore cases and disposed of cases up to 11-03-2019.
The FBR Chief International Taxes said that FBR had received data from 28 jurisdictions. The cases of bank accounts involving US $1 million or above have been detected. "We are trying to approach them and are issuing notices to them," he said. In the next phase, the FBR will probe cases of foreign bank accounts below US $1 million.
He said FBR had taxed first case of offshore asset and recovered an amount of Rs 170 million. On this committee members were astonished that only one case had been detected by the FBR so far.
The FBR has concrete evidence of data about 5,000 property cases in the United Arab Emirates (UAE). "In certain cases, owners of the properties have availed the amnesty scheme and we have to honour them." It was reported in media that 100,000 Pakistanis have assets in the UAE. However, the FBR has concrete evidence of 5,000 properties' data in the UAE.
Under the avoidance of double taxation treaty signed between Pakistan and the UAE, the FBR is asking passport numbers and property details of Pakistanis having offshore properties from the UAE tax authorities under sovereign arrangement between the two countries. In case of the UAE, they are taking time in providing the requisite information.
The UK tax authorities have provided information about 525 properties to the FBR under the MoU signed between the two sides. The FBR has identified Pakistani owners of these properties in UK and is taxing them under the relevant law.
The committee member expressed their concern on the performance of FBR, in this regard, however, the chairman FBR informed that the actual information of the bank accounts were laying with banks and State Bank of Pakistan being a regulator would be in a better position to explain to the committee. The committee decided that SBP, FBR, FIA, SECP and NAB representatives may be invited in the meeting of the committee for proper briefing on the matter.
MNA Dr Aisha Ghaus Pasha said the FBR should share the plan to overcome challenges in taxation of offshore assets. The process has been going on for the last 2 years, but no visible results are seen in this regard. The FBR should also share the way forward on the taxation of offshore assts.
To a query of MNA Naveed Qamar, tax authorities said the payment of taxes on offshore assets did not end the criminal liability of the case.
FBR Chairman Muhammad Jehanzeb Khan informed the committee that in order to fast track process of recovery of taxes from un-disclosed offshore asses, the FBR has introduced the concept of provisional assessment of offshore assets under the recently passed Finance Act 2019 by the Parliament. The FBR should also be fair with the taxpayers during this whole process.
The FBR chairman further said the banks had started regularly providing information to the FBR under section 165A (furnishing of information by banks) of the Income Tax Ordinance 2001.
He said the Directorate General of Intelligence and Investigation Inland Revenue (IR) had detected 8,000 benami transactions.
The FBR Chief International Taxes informed the committee that the specific information of individuals received from other tax jurisdictions under the OECD arrangement was confidential and OECD was monitoring the whole process of exchange of information. Under the confidentiality clause, the individual's specific information cannot be shared with the committee.
The FBR Chief International Taxes said the information of Panama Leaks was very sketchy. The FBR had issued notices to 450 individuals under Panama leaks. The FBR has raised tax demands of Rs 6.5 billion in these cases.
The meeting was attended by MNAs Jawad Hussain, Raza Nasrullah, Jamil Ahmed Khan, Faheem Khan, Nusrat Wahid, Dr Ramesh Kumar Vankwani, Muhammad Israr Tareen, Qaiser Ahmed Sheikh, Dr Aisha Ghaus Pasha, Syed Naveed Qamar and Abdul Wasay, besides the senior officers of FBR, Ministry of Industries & Production and SECP.