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December 7, 2018

Old wine in new bottle

Top Story

December 7, 2018

ISLAMABAD: No new agreement with any foreign country has been signed by the PTI government as yet for exchange of information regarding recovery of billions of dollars hidden abroad by Pakistanis.

In one case, an international convention called “Multilateral Convention on Mutual Administrative Assistance in Tax Matters” of the Organization for Economic Cooperation and Development’s (OECD) aimed at curbing growing tax evasion, has become effective from September this year. With over 100 member countries, the Convention which was signed by former finance minister Ishaq Dar on Sept 14, 2016 at the OECD Headquarters in Paris, allows the member countries to get automatic information of Pakistanis’ wealth and investment in member countries.

In the case of Pakistan, the convention became effective in September this year - after a few weeks of the arrival of the PTI government. In another case, of late ratification of agreement between Pakistan and Switzerland for exchange of information regarding Pakistani accounts in Swiss Banks, was also initiated and signed by Islamabad during the last PML-N regime.

Prime Minister’s Special Assistant on Accountability Barrister Mirza Shahzad Akbar when contacted confirmed to The News that no new agreement has been signed with any foreign state. He explained that the exchange of information about Pakistanis’ wealth abroad is being facilitated by the OECD convention signed two years back.

Regarding the Pak-Swiss treaty, he said that it was initiated and signed by Pakistan during PML-N regime but has been ratified by the Swiss government now following the PTI government’s efforts. He explained that the PML-N government though has initiated the matter in 2013 but delayed it signing for almost four-five years, which raised many eyebrows. Barrister Akbar said following some complaints, the NAB is presently probing the reasons for the delay on part of the PML-N government to get the agreement signed earlier. He said that the delay has caused suspicion about the four-five year period of the PML-N government. Akbar, who is struggling hard to get back corrupted money stashed abroad, however said that the OECD convention has provided a platform to get information about Pakistanis wealth in many countries.

On September 14, 2016, the OECD itself announced that Pakistan becomes the 104th jurisdiction to join the most powerful multilateral instrument against offshore tax evasion and avoidance.

A press release issued by the OECD had said: “14/09/2016 – Today, at the OECD Headquarters in Paris, Senator Muhammad Ishaq Dar, Minister for Finance of Pakistan, signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters in the presence of OECD Secretary-General Angel Gurría, therewith becoming the 104th jurisdiction to join the Convention.”

It added, “The Convention is the most powerful instrument for international tax cooperation. It provides for all forms of administrative assistance in tax matters: exchange of information on request, spontaneous exchange, automatic exchange, tax examinations abroad, simultaneous tax examinations and assistance in tax collection. It guarantees extensive safeguards for the protection of taxpayers’ rights.

”The OECD had added, “By signing, Pakistan will send a strong signal of its commitment to fight offshore tax evasion and avoidance. Moreover Pakistan is a member of the BEPS inclusive framework and has such will exchange automatically country by country reporting as required by Action 13 of the BEPS package. The Convention provides the ideal instrument to swiftly implement automatic exchange so the signing and ratification of the Convention is very timely.”

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