Pakistan willing to sign OECD convention on anti-bribery: Dar

ISLAMABAD: After signing multilateral convention to go against tax evaders, Pakistan has expressed its willingness to sign OECD convention on anti-bribery, enabling Islamabad to exchange information related to kickbacks and receiving of dirty corruption money with 40 countries into mega projects.

“We have shown our willingness to sign anti-bribery convention with OECD multilateral forum on which 40 countries had already signed in order to discourage kickbacks and corruption money getting for mega projects. The federal cabinet also granted approval for signing bilateral exchange of information with Switzerland on bilateral level,” Federal Minister for Finance Ishaq Dar said while addressing seminar organised by FBR on OECD’s multilateral convention on mutual administrative assistance in tax matters here on Wednesday.

Ishaq Dar argued that the OECD’s multilateral convention was more beneficial for Pakistan’s prospects but the government did not give up bilateral treaty with Switzerland. He said that there was long wish list from Swiss authorities by demanding reduction in tax rates, getting exemptions and other incentives but Pakistan refused to entertain their demands so finally both sides agreed for finalising the initial of revised agreements. “The cabinet has granted approval and now we are waiting for Swiss authorities to complete their procedural requirements in this regard,” he added.

The minister said the government took 32 months to complete procedures for signing OECD’s convention on which Pakistan had signed the convention on September 14 this year at Paris. He said the OECD’s multilateral convention on tax matters would become operational by end of 2017 or early 2018.

The minister said that OECD was firm to bring about three dozen tax havens into the fold of multilateral forum as it was the most effective global outfit to go against tax evaders around the globe.

He said that Pakistan would have to make more legal changes into tax laws in order to align with OECD’s convention as transfer of pricing related issues needed to be settled.

The minister said that economy should be decoupled with politics as sit-ins would be causing loss to the national economy. He said the government was ready to sign OECD’s convention on anti-bribery as their intention was crystal clear that they did not want to permit kickbacks and corruption related to mega projects. This convention, he said, was already signed by 40 countries and no sovereign countries could allow such practices, he added.

He said the OCED’s convention on tax matters took almost 32 months to sign but they would make efforts to finalise anti-bribery convention in 32 weeks period. He said the anti-bribery convention would be signed during 2017. The minister said that Pakistan’s foreign currency reserves were now stood at $23.4 billion which were around $3 billion when the government took reins of power in 2013. He said there would be $310 million due payment by next week but the reserves position would remain over $23 billion.

About tax collection, the minister said the FBR would meet its desired tax collection target of Rs3621 billion for the current fiscal year as the FBR’s collection went up by 60 percent in last three years which were used to register growth of just 3 percent few years back.

Adviser to PM on Revenues Haroon Akhtar Khan said on this occasion said that noose was tightening against tax evaders after signing OECD’s convention, upcoming Benami law and amended Anti Money Laundering Law so the government was determined to go against tax evaders. There is need to clean out past practices and it will be better for business to come and comply with tax laws, he added.

“This is reality that noose is tightening against tax evaders. Rather passing through sleepless nights, it is better to clean balance sheets by businessmen,” he made it clear.

FBR Chairman Nisar Mohammad Khan said that there were 40 tax havens and Panama had not yet signed this multilateral convention for cooperating with them. He said the FBR kick-started pilot project in collaboration with UK’s tax machinery (HRMC) for placing mechanism for automatic exchange of information under provisions of OECD’s multilateral convention on exchange of information on tax matters. “We are preparing rules for automatic exchange of information, upgrading Information Technology (IT) and its support system and placing confidentiality and safeguard protocols,” he added.

The HRMC, UK team will be visiting Pakistan by November this year while OECD’s team will be visiting by January 2017 to discuss automatic exchange of information, added the FBR chairman.

Massood Naqvi, Chairman Tax Reform Commission said that there were certain reservation on this treaty including exclusiveness to reserve right to hold up certain information and FBR’s capacity for using of information technology against serious tax crimes.