Bringing money stashed abroad a test for Imran

August 17,2018

As Pakistan Tehreek-e-Insaf (PTI) Chairman and prime minister-in waiting Imran Khan has expressed his resolve to bring back money minted by Pakistanis through illegal means and stashed in banks abroad, Pakistan has not inked any agreement with any country so far to acquire even information about any such bank accounts.

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ISLAMBAD: As Pakistan Tehreek-e-Insaf (PTI) Chairman and prime minister-in waiting Imran Khan has expressed his resolve to bring back money minted by Pakistanis through illegal means and stashed in banks abroad, Pakistan has not inked any agreement with any country so far to acquire even information about any such bank accounts.

PTI leader and would-be finance minister Asad Umar, during an interview has also announced to investigate the issue of $200 billion illegal money of Pakistan nationals in Swiss banks. It is going to be a big test for the incoming government that how it brings billions of dollars reportedly deposited in foreign banks.

While much has been said and written about the fabled wealth of the Pakistanis stashed offshore, no authentic information is available about the wealth and assets of Pakistanis. As the situation stands, despite the best efforts, none of the governmental agencies, including FBR, FIA and SBP, has succeeded in getting authentic information regarding Pakistanis’ bank accounts and properties held abroad and all the information in this regard available with an investigation agency has come from sources not authenticated by any foreign country, The News learnt reliably.

The News also learnt that all agencies have expressed their inability to proceed against any person on the basis of information collected by unauthentic sources. Similarly, no foreign government has provided as yet certified information to the Pakistani authorities.

A source in the Federal Board of Revenue confirmed that a team led by a BS-20 officer had visited Switzerland in 2014 to sign agreement for avoidance of double taxation treaty. He further disclosed that the team that visited Switzerland for negotiations in 2014 was led by Chief International Taxes (grade 20 officer) who led negotiations for all the tax treaties in his tenure which must be more than a dozen. The team that visited Switzerland in 2016 to renegotiate comprised two BS 20 officers. Chairman FBR had never been part of that team, he clarified when asked about former Chairman Tariq Bajwa’s visit to Switzerland.

The team also had the mandate to amend the article of the tax treaty related to exchange of information but it went beyond its mandate by amending other articles as well which granted many concessions to Switzerland. Interestingly Switzerland, was nevertheless bound to insert the new article on exchange of information in the tax treaty since it was incorporated by the OECD itself in its tax model since 2010 and Switzerland could not have been refused its insertion. So it was futile exercise.

He further told The News that according to the new provision on exchange of information, Pakistan could seek information on banking and other details only in specific cases by providing Switzerland the details about where the information would be available and that all efforts have already been exhausted in Pakistan to get this particular information. Moreover, the information sought is required to be relevant for tax purposes and could not be used for any other purpose without the consent of information supplying state. Further that Switzerland has a procedure related to taxpayers’ rights where it shares the request for exchange of information with the person about whom it has been sought and such persons generally get stay order from Swiss courts which lasts for more than a year. This all process is only case to case basis and no bulk information can be obtained. Elaborating actual situation he said If Switzerland was asked to provide banking details of all the Pakistanis accounts in their banks, they would flatly refuse because it is considered a fishing expedition in tax treaties which doesn’t warrant the supply of information by the requested state.

He further stated that this was also important to know that any tax agreement did not come into force immediately. Further that after finalizing agreement draft then it is submitted to the concerned parliament, in case of Pakistan to the cabinet, and after that approval both parties sign it. Then this agreement is ratified by respective country’s parliament. Switzerland has an additional procedure of putting it before public as well by undergoing a referendum which has an additional 100 days time period.

The agreement in no way could bring back even a single dollar and this is completely outside the scope of a tax agreement. For that Switzerland had another Restitution of Illicit Assets Act 2010 which does not fall in the purview of FBR rather related to ministry of interior or law division. The treaty with Switzerland was finally renegotiated in 2016 and all the concessions previously granted were withdrawn, he disclosed, adding that the revised treaty was then signed in March 2017 in Pakistan.

The only information which was available to public was from Indian media which said in 2016 that the total funds linked to Pakistan in Swiss banks stood at 1.42 million USD at the end of 2016.

When contacted FBR spokesman said Switzerland never offered to return Pakistanis wealth deposited in her bank. Swiss authorities never, at any time, offered to return any amount of Pakistanis deposited in their banks. He further stated that Pakistan have agreement with Swiss government which is meant only for avoidance of double taxtation but not for retrieval of assets.

State Bank of Pakistan (SBP) spokesperson said Pakistan and eventually SBP had no information about Pakistanis’ bank accounts in any country including Switzerland. Further that SBP had never been involved in any such investigation nor SBP can obtain any such information at the moment, he concluded.

Similar point of view came from FIA spokesperson, who said once Swiss minister had stated that Pakistanis had about 200 billon in USD banks but they never confirmed this information at government level.


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