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March 15, 2019

FBR receives details of 152,000 offshore accounts

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March 15, 2019

ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday informed the National Assembly’s Standing Committee on Finance that they did not set any recovery target out of total 152,000 offshore accounts because there was possibility of moving out money through legal channels.

They further told the NA panel that the FBR sent out tax notices to 400 Pakistanis having offshore assets and possessing Rs55 billion. The per account money in these accounts stands in the range of $1 million or above but in the second phase notices will be sent to those possessing less than $1 million in their offshore accounts.

The Member Inland Revenue Policy said that the tax authorities identified 8,000 Benami domestic bank accounts. In the first phase, the FBR would go after only in big cases. “In the Panama Papers, out of total 400 names, we have identified 291 while they are unable to trace out remaining ones but so far in 15 cases they generated tax demand of Rs15 billion and so far recovered Rs6.5 billion out of it”, said the FBR officials.

The tax recovery target cannot be given on the basis of information received about 152,000 accounts, as the account holders might have transferred the money through legal means and they may also have other plausible justifications”, said chairman FBR Jehanzeb Khan as he was responding to a question raised by PML-N MNA Qaiser Sheikh.

In September last year, the OECD had shared the information on over 152,000 bank accounts owned by Pakistani nationals with tax authorities.

On the basis of information received from the OECD, so far only one person has been taxed and the FBR recovered Rs170 million from him, said Mohammad Ashfaq, Chief FBR international taxes. “It’s tedious process and there is no quick fix”, said Mohammad Ashfaq. In the first phase, the FBR moved against those who possessed more than one million dollars in their accounts, he added. There are less than 400 people who have one million dollars or above in their offshore accounts.

At the current pace, the FBR cannot recover the claimed $200 billion in next 30 years, said Dr Ayesha Ghaus Pasha belonging to PML-N. While responding to questions on Panama Papers leaks, Ashfaq said that the Panama’s information was very sketchy. After seeking more details from seven subsidiaries of the Panama law firm Mossack Fonseca, about 291 cases have been identified, he added.

The FBR officials told the committee that they identified 579 owners of Dubai properties and so far over 400 people were given notices to pay taxes. But some of them have availed the offshore tax amnesty scheme. Over 100000 Pakistanis own properties in Dubai but the FBR has concrete information about 5000 cases. The Benami Transactions Prohibition Act, according to FBR officials, does not apply to offshore assets.

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