FBR seeks details of those named in Panama, Bahamas leaks

ISLAMABAD: In order to probe the Panama and Bahamas leaks, the Federal Board of Revenue (FBR) has asked the State Bank of Pakistan (SBP) and the Securities and Exchange Commission of Pakistan (SECP) to provide details of the named persons’ local and overseas bank accounts in Pakistani banks, inward and outward remittances, bank lockers, loan write-offs and investments made by these individuals in the country’s capital markets.

In recommendations in front of Minister for Finance Ishaq Dar last week for devising a strategy to probe the PanamaLeaks, the FBR also asked the Finance Division to direct the Financial Monitoring Unit (FMU), an anti-money laundering outfit, to provide details of suspicious transaction reports (STRs) and cash transaction reports (CTRs) and Central Directorate of National Savings (CDNS) to provide details of investments and deposits of all these individuals (444 individuals named in 594 individuals to the FBR’s Directorate  Intelligence and Investigation (I&1) Inland Revenues as early as possible.

Quoting legal provisions under section 176 of Income Tax Ordinance 2001, the FBR is empowered to seek information. Under section 176 of Income Tax Ordinance 2001, the FBR can issue notice to obtain information or evidence and this legal provision states that the commissioner may, by notice in writing, require any person whether or not liable for tax under this ordinance (a) to furnish the commissioner or an authorised officer, any information relevant to any tax leviable under this ordinance to fulfil any obligation under any agreement with foreign government or governments or any jurisdiction as specified in the notice.

When contacted, FBR’s spokesman Dr Iqbal said the FBR made request to other agencies for providing readily available information about those persons whose names appeared in Panama or Bahamas leaks. 

However, according to official documents, the FBR sought coordination with other agencies, especially from Finance Division, SBP and SECP to discharge its assigned task for probing PanamaLeaks.

The FBR has sought assistance from the SBP on certain issues including bank accounts of individuals in Panama and Bahamas leaks. The FBR sought information on foreign and local currency accounts by individuals named in PanamaLeaks, both inward and outward remittances made by these individuals and bank lockers maintained by these individuals in Pakistan. Loans provided to these individuals by banks or financial institutions, loans written off by the banks of these individuals/companies where they are directors and defaults committed by these individuals in any case.

The FBR has also requested the SBP and SECP to nominate focal persons for better coordination and providing timely assistance to the Board for discharging its responsibilities. The FBR has sought certain details from the SECP for probing PanamaLeaks effectively including investments of individuals involved in Panama/Bahamas leaks in capital markets, chartered accountants and consultants of individuals involved in PanamaLeaks and of companies where they are directors and insurance policies held by these individuals.

The FBR has urged the SECP to expedite provision of details of individuals involved in BahamasLeaks who are directors of Pakistani companies. One tax expert told this scribe that the establishment of offshore companies is not crime in accordance with tax laws but the problem arises when their declared income did not commensurate with their investment made outside Pakistan. Secondly, he said, these individuals did not send their money through legal banking channels and after getting due approval from the government and SBP.