Revenue board urged to restrain officers from misusing AML laws

KARACHI: Tax practitioners have urged the Federal Board of Revenue (FBR) to restrain tax officials from misusing anti-money laundering laws and harassing taxpayers.

Pakistan Tax Bar Association (PTBA) in a letter sent to FBR chairman on Thursday, stated that tax officers were issuing notices under Anti-Money Laundering (AML) Act, 2010 to third parties seeking information with the argument that the person was being investigated for money laundering.

“This is not only unfair and un-just, but it is seriously tarnishing the reputation of individuals, who have not committed any crime,” the PTBA said.

Abdul Qadir Memon, president, PTBA, said such actions were contrary to the provisions of AML 2010 and notices in this regard clearly indicate lack of proper understanding of the provisions of AML 2010 by the officers of FBR.

The tax bar said that globally money laundering had been viewed as very serious offence and the stigma associated with it was very severe.

“A person is investigated and charged under money laundering after thorough inquiry and collection of evidences by trained professionals to establish that the person was involved in crime money,” the Pakistan Tax Bar Association said.

The apex tax bar also highlighted flaws in the AML Act 2010, which make individuals liable to charge under the laws on small errors such as furnishing incorrect NTN or alleged false information. “It is absolutely incorrect understanding of anti-money laundering law applicable globally,” the PTBA said.

The tax bar also pointed out that at present, the standard operating procedures (SOPs) had not been developed by the FBR for its officers enforcing AML 2010, who were not fully trained to translate policy of the new law into an acceptable and workable practice.

In order to improve and correct enforcement of AML laws, the PTBA suggested the FBR to: Initiate intensive training of the officers and staff of FBR in proper understanding of provisions of AML 2010, who are responsible in enforcing the law; develop detailed SOPs for officers and staff of FBR in consultation with the stakeholders for enforcement of AML 2010; and also not to take action gainst an individual, unless he has been provided proper opportunity of being heard and proved guilty. The association offered its services for training of FBR officers and development of SOP etc.