FBR seeks transaction data from forex firms

KARACHI: The Federal Board of Revenue (FBR) has issued notices to at least 24 foreign exchange companies, seeking details of people who procured the US dollars from them, sources said on Tuesday.

The notices have been issued in connection with the flight of dollars during the past couple of years, which resulted in depreciation of the local currency, the sources said.

The sources said Corporate Regional Tax Office (CRTO) Karachi issued the notices to obtain information under a section (176 of Income Tax Ordinance 2001).

The FBR is seeking information of particularly those who purchased dollars and remitted them abroad for education, health and travelling purposes.

Export of dollars for Pakistani students studying in foreign education institutions is exempted from fund declaration on electronic form under a foreign exchange manual issued by the State Bank of Pakistan. There is, however, $10,000 cap on remitting amount for such purposes.

The FBR sources said it was learnt that several people purchased dollars in large quantity and waiting of further depreciation of the local currency to earn on disparity.

The corporate regional tax office asked the exchange companies to provide details of financial transactions, including name, computerised national identity card and addresses and dates.

The FBR sources said the exchange companies were given one week to provide information of such purchasers in a prescribed manner.

Earlier this year, the regulators, including the Federal Board of Revenue, State Bank of Pakistan, Anti Narcotics Force, and Federal Investigation Agency launched major crackdown against hoarding of dollars.

The FBR asked the central bank being the regulator to obtain information from the exchange companies for identifying such individuals involved in hoarding of dollars.

A meeting was held in August to discuss the issues, which was attended by the State Bank of Pakistan, Director General Federal Investigation Agency, Member Federal Board of Revenue, and Director General Financial Monitoring Unit along with representatives of law enforcement agencies.

The SBP, in its response to the FBR request for information of transactions made by exchange companies, said it is a statutory body that regulates / supervises exchange companies under the relevant provision of Foreign Exchange Regulation Act 1947.

“However, we [SBP] understand that in terms of Income Tax Ordinance 2001 FBR is authorised to collect transactions data from exchange companies or any other financial institutions,” the central bank said in a statement. “It would, therefore, be appropriate that FBR directly approaches the exchange companies for required information under the relevant provision of law.”