FBR to start automatic exchange of information under OECD from Jan 1

KARACHI: The Federal Board of Revenue (FBR) has finalised all arrangements to start exchange of information to prevent fiscal crime and tax evasion with the international community from January 1, 2018, officials said on Thursday.

In this connection the revenue body has established five zones in major cities including Karachi, Lahore, Islamabad, Quetta and Multan to utilise information of Pakistanis having deposits in foreign banks for identifying tax evasion.

The FBR Headquarter, Islamabad will be the focal point to send and receive the information from the international community.

The headquarter would liaison with zonal office for receiving non-residents having accounts in local banks and sending information of Pakistanis received from abroad for further action in case of tax evasion or fiscal crime.

The arrangements have been made under the Organisation of Economic Co-operation and Development (OECD) convention. On September 14, 2016 Pakistan became the 104th economy to join the most powerful multilateral instrument against offshore tax evasion and avoidance.

One of the zones for Automatic Exchange of Information (AEOI) has been established at Large Taxpayers Unit (LTU) Karachi, which will have jurisdiction over cases across Sindh.

An official at the LTU Karachi said the OECD member countries would provide details of bank deposits/investment of Pakistanis in those jurisdictions from September 2018 for the transactions made during January – December 2017.

The official, however, said the FBR would start sending the information from next week and would have authority to obtain information about any particular person from member countries.

The official said that each zone has staff of about eight persons and security of the zones had been ensured as per OECD guidelines.

“Each zone has dedicated internet connection and security cameras. The FBR will monitor directly from the main OECD office in Islamabad,” the official added.

Exchange of information related to offshore accounts of Pakistanis in famous Panama gate scandal was not possible under this convention as Panama was not member OECD country, the official said, adding Pakistan would able to obtain information of multibillion transactions from Swiss banks under this treaty.

Under the treaty the banks will share details of all new bank accounts of non-residents with the member countries.

However, banks are bound to share information of non-resident account holders having deposits over one million dollars from account opening date.

The official said the exchange of information was not limited to banks only as many other financial institutions are also share information of non-residents.

In normal circumstances, fund managers do not provide details of investors, but the official said that member countries would be able to obtain information about the investment made through fund managers.