close
Advertisement
Can't connect right now! retry

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!

add The News to homescreen

tap to bring up your browser menu and select 'Add to homescreen' to pin the The News web app

Got it!
August 7, 2020

FBR asserts new rules to extract accountholders information

Business

August 7, 2020

KARACHI: The Federal Board of Revenue (FBR) is determined to legally bound banks through new rules to share all requisite accountholders information with the tax authorities despite the banking sector’s reluctance to do so, officials said on Thursday.

Tax officials said the FBR finalised new rules to enforce existing laws of obtaining information of accountholders from banks. The rules would help in obtaining information from banks under a section (165A) of the Income Tax Ordinance 2001.

FBR officials said the section was introduced through the Finance Act 2013, making it mandatory for banks to share details of transactions made by their account holders. However, the FBR could not be able to obtain information as banks approached courts to restrain tax authorities as secrecy laws did not allow banks to do so.

The government, through the Finance Act 2018, relaxed the information sharing and confined data to only major transactions. As per the amendment introduced through the Finance Act 2018, banks were made responsible to share information of transaction such as cash withdrawal aggregating to one million or more during a month, monthly deposit of Rs10 million or more and credit/debit card payment of above Rs250,000 in a month.

Banks remained reluctant in sharing information of their accountholders with the tax authorities despite these changes.

In November last year after a meeting with the then FBR chairman Shabbar Zaidi, the Banks Association of Pakistan agreed to share information and withdraw the cases from the court of law.

The officials said the latest rules were drafted in connection with the outcome of the meeting between Zaidi and banks.

Under the new rules, FBR intends to obtain information of deposits, withdrawals, payment through credit cards and profits on debt, according to the officials. Banks would provide details of individuals making withdrawal of one million rupees during a month. The particulars include computerized national identity card/national tax number, name, address, account opening date, international bank account number, and resident/non-resident status.

Similar information of account holders would be provided by the banks in case of deposits of above Rs10 million and payment through credit/debit card.

The rules also make it mandatory for banks to provide details of all recipients of profit on debt during a financial year. Similar information is to be furnished by the banks.

Under the new rules, the banks will be required to provide such information of deposits, withdrawal and payment through credit/debit cards on a monthly basis. However, the information of recipients of profit on debts will be furnished within three months from the end of the financial year.