Senate panel approves ‘Benami Bill 2016’

Islamabad

Amid reservations expressed by the State Bank of Pakistan (SBP) over apprehension of raiding premises of banks, the Senate Standing Committee on Finance on Wednesday approved Benami Transaction Bill 2016 with certain amendments as the proposed law would be empowering raiding premises with the permission of Commissioner Inland Revenues (IR).

However, Chairman FBR Nisar Mohammad Khan told the Senate panel that the banks were resisting giving access to bank accounts but after signing Organisation for Economic Co-operation and Development (OECD) agreement the days would be numbered when they used to hide such information for the purpose of tax matters.

Senator Saleem Mandviwalla presided over a meeting of the Senate Standing Committee on Finance and Revenues at the Parliament House. After detailed discussions the Committee passed the ‘Benami Transactions Bill, 2016’ with certain amendments to check holding property in Benami.

On Benami transaction bill, the representatives of the SBP argued that they were not objecting to seeking information from banks on probe related to Benami transaction but they were concerned about granting powers to the FBR for raiding and searching premises of banks as it could cause harm to the reputation of the banks. They said that they were concerned related to proposed clause 19 of this bill that granted powers for raiding and searching premises of banks during the investigation of Benami transaction against account holders.

Federal Secretary Finance Dr Waqar Masood showed his annoyance over this statement given by SBP officials and said that they were doing wonders to express such views here at this forum and added that it was only apprehension expressed by them which had nothing to do with reality.

The FBR’s Member Dr Iqbal told the committee that the FBR possessed same powers under section 175 of Income Tax Ordinance 2001 for raiding premises but the tax machinery had never raided any premises of the banks so far so nothing of this sort would happen in the future as well.

The panel also considered the Protection of Economic Reforms (Amendment) bill 2016 as the Chairman of the committee Saleem Mandviwalla said that the dollars were remitted out of the country through cash withdrawals and banking channels. 

The representatives of commercial banks told the committee that the proper scrutiny mechanism was in place under which they sought reasons and source of income before remitting dollars out of the country. They said that the commercial banks were holding $6.5 billion in foreign currency accounts. The committee deferred this bill.

The committee approved amendments under which the age of tribunal members was extended to 65 years instead of 63. The award for whistleblowers was also approved by the committee and the FBR would issue rules after enactment of this legislation. 

The panel also considered the ‘Public Private Partnership Authority Bill, 2016. Secretary Finance briefed the meeting that the government wanted to establish an authority to bridge financing gap for infrastructure projects by establishing public private partnership. The proposed bill possessed 27 clauses which deal with establishment of authority and its board chaired by Minister for Finance and vice chairman secretary Finance. The government will also establish Viability Gap Fund (VGF) under which Ministry of Finance would provide money for viable infrastructure.