Politics behind FBR’s notices to owners of offshore companies

ISLAMABAD: The belated issuance of notices to around 600 owners of offshore companies, including the members of Prime Minister Nawaz Sharif’s family, named in the PanamaLeaks by the FBR is more of a political than a technical move.

Informed FBR sources admit that because of political pressures, these notices have been issued otherwise there is not much for the Board to proceed against those named in the PanamaLeaks.

When asked, the FBR sources said that the Board knows it well that the outcome of these notices would be no different from what is expected i.e. there is no material and legal options available to proceed against most of the persons, if not all of them.

These sources said there has been a lot of hue and cry in political circles and in the media against the FBR’s inaction on the matter.“These political pressures made us issue the notices though we know the result,” a source said.

He said in the case of the prime minister’s sons, the boards knows the answer would be that they are non-residents and thus could not be touched and probed.The source added those who expect from the FBR to retrieve all the details from Panama about the offshore companies belonging to Pakistanis do not know that this is not possible.

Panama is a tax haven territory. “We even don’t have taxation treaty with Panama to allow us to retrieve the information we want from them.”It is also explained that even otherwise the limitation clauses of the Pakistan tax laws also bar the FBR from looking into most of these cases. “If there is no legal bar and there is also solid evidence available, the tax man is bound to proceed,” the source added.

It is said that as per the reports, the Saifullah family owns quite a large number of offshore companies in Panama. However, in case of 80% of these companies, the limitation period apply, which means the FBR can’t initiate any action.

Now at least, the Board sources said, if the FBR is summoned by any authority, including the apex court, at least it would have something to show.Last week, the day Imran Khan and Dr Tahirul Qadri staged protest rallies in Lahore and Rawalpindi, the FBR chose to inform the media that it had issued notices to around 600 owners of offshore companies, including the family members of Prime Minister Muhammad Nawaz Sharif whose names appeared in the PanamaLeaks.

According to media reports, the notices were dispatched under Section 216 (notice to obtain information or evidence) of the Income Tax Ordinance 2001 to verify information with the FBR’s database. It was reported that the FBR wanted to get the viewpoints of the offshore companies’ owners.

The persons concerned were asked to explain within 15 days if they were owners of offshore accounts, they should reveal the source of investment and whether the same have been declared in their income tax returns.

Under Section 216 of the Income Tax Ordinance 2001, the commissioner may, by notice in writing, require any person, whether or not liable for tax under the Ordinance to furnish to the Commissioner or an authorised officer, any information relevant to any tax leviable under this Ordinance as specified in the notice; or attend at the time and place designated in the notice for the purpose of being examined on oath by the Commissioner or an authorized officer concerning the tax affairs of that person or any other person and, for that purpose, the Commissioner or authorized officer may require the person examined to produce any accounts, documents, or computer-stored information in the control of the person.