Dollars stashed in Swiss banks reverberate in Senate

Dar says highlight of renegotiated treaty is replacement of Article 26 on exchange of information with a new one; exchange of tax info to help catch tax dodgers and corrupt

ISLAMABAD: The Senate was informed on Thursday that the government was seriously working to seek help from the new Swiss policy that allows the Swiss government to exchange heretofore confidential information about ill-gotten monies stashed up in clandestine Swiss banking industry.

During the question hour, PTI’s Senators Nauman Wazir Khattak and Mohsin Aziz questioned why the government had not been able so far to make progress on bringing back $200 billion stashed in Swiss accounts.

In written replies, Finance Minister Muhammad Ishaq Dar and Law Minister Zahid Hamid said the government had initiated simultaneous efforts to become a member of internationally-sponsored initiatives like the Global Forum for Transparency and Exchange of Tax Information and the Multilateral Convention for Mutual Administrative Assistance.

They noted that steps would also enable Pakistan to send and receive information under automatic exchange and this would provide a strong signal of its commitment to fight tax fraud and evasion at the international level.

“Pakistan’s integration with the rest of the world this way will help us retrieve in the coming years all important bank account, dividend, interest and asset ownership information not only from Switzerland, but also from other tax havens,” they said.

Dar noted that exchange of tax information was the new mechanism for catching the tax dodgers and corrupt, who siphon off and hide their ill-gotten wealth in Swiss banks and other tax havens.

He said the government had decided to review the existing avoidance of double taxation agreement, particularly its article on the exchange of information. The cabinet approved a summary to re-negotiate the avoidance of double taxation agreement with Switzerland.

The matter was taken up with it through diplomatic channels and negotiations were held on August 26-28, 2014 in Switzerland.

The minister noted that the highlight of the re-negotiated treaty was replacement of archaic Article 26 on exchange of information with the new one reflecting the internationally accepted standard on exchange of information, backed both by the last OECD and UN models.

The new article upon its formal signing of ADTA will oblige Swiss authorities to exchange all the requested information, including confidential bank accounts, he added.