Pakistanis’ assets abroad: Government requests 10 more countries for info exchange

ISLAMABAD: Pakistan has made formal requests to 10 more countries under the OECD mechanism as well as Switzerland separately for exchange of information about those Pakistanis who stashed their assets abroad to evade taxes.

“We have made requests to 10 more countries for getting automatic exchange of information and so far we have received details about 150,000 bank accounts from 29 jurisdictions under the Organisation for Economic Cooperation and Development (OECD) treaty. We have also made another request to Switzerland for exchange of information in January (last month) and they are willing to share data but so far it has not yet been operationalized,” Minister of State for Revenue Hammad Azhar said at a news conference here at the PID on Thursday.

The minister of state said that differences with the International Monetary Fund (IMF) were narrowing down and when the Fund would show leniency in its conditions, progress will be achieved. He ruled out possibility of taxation measures of 0.5 percent of GDP as major stumbling block in the way of agreement with the IMF and stated that efforts would be made to achieve the set target of Rs4,398 billion in the current fiscal year.

Hammad Azhar said that the Federal Board of Revenue (FBR) was establishing six Commissionerates as they were doing profiling of received information out of 150,000 account holders from 29 jurisdictions under the OECD. He said the government proposed provisional assessment of owners of offshore assets through reform bill introduced in the Parliament in a bid to foil attempts for moving out of assets or money due to routine lengthy process of conducting assessments. He claimed that although the OECD treaty was done in the tenure of the last regime, but they placed required procedures for ensuring exchange of information after coming into power.

The minister of state also hinted that the FBR was going to propose something new before the judges of Supreme Court of Pakistan on next hearing for restoration of tax on telecom sector as the apex court of the country had suspended collection of withholding tax on mobile usage. Alone due to this suspension of tax, he said, the FBR was expected to face a revenue loss of Rs100 billion, adding that they were making efforts to table such proposal before the SC that might pave the way for restoration of some kind of tax on telecom sector. However, he refused to share the details of this proposal and contended that there was no proposal to slap Federal Excise Duty (FED) on usage of more than Rs500 load on monthly basis.

Hammad Azhar announced to gear up campaign against high net worth individuals in weeks and months ahead in order to broaden the narrowed tax base.

When asked about duplication of taxes, he said that first of all they would make efforts to club federal taxes and then provinces would be convinced for clubbing provincial and federal taxes at the forum of Council of Common Interests (CCI) in a bid to ensure ease of doing business in Pakistan. He said the internal audit of the FBR would report to prime minister directly, however, many insiders say that the internal audit wing of the FBR was currently weakest wing of the Bureau that first of all should be strengthened instead of only changing its reporting authority.

While drawing comparison with the performance of the last PML-N government, he said the credit rating agencies downgraded rating from B to B-negative on the basis of pre-September economic data as they left the country in worst situation.

Earlier, the PML-N leader Ahsan Iqbal held the PTI regime for economic morass within ruling over six months period as he alleged that the hard work done by them in last five years got wasted within six months rule of the PTI.

Without mentioning any name, Hammad Azhar said the CPI-based inflation had gone up by 5 percent in first six months rule of PML-N, but it hiked by just 1.4 percent in first six months of the PTI rule. he said the current account deficit had ballooned from $2.5 billion per annum to $19 billion in last five year rule and the budget deficit also witnessed highest ever absolute figure in any financial year of the country’s history.

He said the foreign direct investment stood at $1.072 billion under the PTI regime, while it had just fetched $426 million in first six months rule.