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FBR to file FIRs against owners of offshore companies

By Mehtab Haider
November 13, 2016

For not replying to tax notices . . .

ISLAMABAD: The Federal Board of Revenue (FBR) is making preparation for registration of FIRs against those selected individuals who owned offshore companies and were named in Panama/Bahamas Leaks but failed to comply against the sent-out tax notices within the stipulated timeframe.

The FBR found 114 cases whereby individuals were non-compliant despite sending them tax notices after their names appeared in PanamaLeaks. 

Under the income tax law, the FBR is empowered to go ahead with prosecution but it is yet to see how the Board demonstrates its muscles against those who would be proven tax defaulters but never bothered to come and comply in accordance with different clauses of the tax law.

There is a long, lengthy and complicated process for registration of FIRs. Under the law, the FBR’s commissioner can launch complaint before Special Judge Customs and Taxations against any individual in case of tax matters and this judge possesses powers to convert this complaint into FIR.

Around 114 cases existed in accordance with the FBR records where owners of offshore companies were either found as non-filers or irregular filers and Karachi remained on top of this list whereby 21 cases were related to Corporate Tax Office (CRTO) Karachi, 20 cases under jurisdiction of Large Taxpayer Unit (LTU) Karachi, 11 cases to Regional Taxpayer Office (RTO) III-Karachi and six cases related to RTO-II Karachi. 

Eleven such cases exist in RTO-II Lahore, nine cases in CRTO Lahore and one case is under jurisdiction of LTU Lahore. There are nine cases of non-filers or irregular filers of income tax returns related to RTO Islamabad and one case is related to RTO Rawalpindi. There are four cases related to RTO Hyderabad and three cases related to RTO Peshawar. There is one case under jurisdiction of RTO Sialkot.

The FBR’s investigators also found that eight cases were not traceable for them so far but they were making efforts to ascertain their whereabouts. They have also determined that there were seven duplicate names in PanamaLeaks.

The tax machinery also instructed its large taxpayer units (LTUs) and regional taxpayer offices (RTOs) all over the country to make all kind of arrangements by gathering all relevant information in the cases of Panama/Bahamas Leaks if the Supreme Court of Pakistan establishes any Commission to probe this matter. 

“We are making arrangements for prosecution against those who have failed to comply against our tax notices. The FIRs will be registered in accordance with clauses of Income Tax Ordinance 2001,” official sources in the FBR confirmed to The News here on Saturday.

The tax havens disclosed through PanamaLeaks showed that there were total 270 entities which were owned by 444 individuals from Pakistan. In British Virgin Islands, 168 entities were registered which were owned by 271 Pakistani individuals, 12 entities in Bahamas owned by 25 individuals, 41 entities in Panama owned by 84 individuals, 36 entities in Seychelles owned by 44 individuals, seven entities in Niue owned by 10 individuals, two entities in Samoa owned by four individuals, one entity in Mauritius owned by three individuals, one entity in Jersey owned by one individual and two entities in Anguilla owned by two Pakistani individuals.