FBR discovers discrepancies in shares data

KARACHI: Tax authorities have found inaccuracy in the disclosure of shares sale/purchase by some companies to evade taxes, said official sources on Saturday.
“We detected discrepancies in transactions of the companies after screening their financial reports and cross-matching them with the data obtained from the National Clearing Company of Pakistan Limited,” said an official at the directorate. “Mismatch was found on declaration in share prices.”
The official said the directorate has sent the cases to the concerned tax departments for further proceedings.
The Directorate of Intelligence and Investigation (Inland Revenue) started the monitoring of shares transaction on the information that some shareholders were hiding the actual details. “The Federal Board of Revenue is ambitious to identify the tax evaders in the stock markets through looking into the sources of their investment,” said a tax official.
In Pakistan, investors in stock markets were enjoying amnesty from the declaration of their sources of investment and capital gains taxation for 37 years until it was withdrawn in 2010/11 fiscal year.
However, the Securities and Exchange Commission of Pakistan supported the argument that the investment disclosure would be tantamount to an economic disaster.
In April 2012, the government, through an amendment in the Income Tax Ordinance, again gave immunity to stock investors from investment disclosure till June 30, 2014.
It was on the condition, “the amount remains invested for a period of 120 days in the manner as may be prescribed.”
However, capital gains tax remained intact.
Shahid Hussain Asad, Member Inland Revenue, in his presentation before an international conference a decade ago, said that there were number of formal and informal lobbies in Pakistan, which influenced policy formulation, including tax reforms.
“Some of the most influential lobbies include agriculturists (large landholders with strong presence in parliament), trade associations, chambers, banks and stock markets,” noted the presentation’s copy.