Despite high priority of Prime Minister Imran Khan, the government could dispose of just 19 cases and recovered a paltry sum of Rs883 million ($6 million) out of total 57,450 cases worth $7.5 billion referred by the Organisation for Economic Cooperation and Development (OECD).
The Federal Board of Revenue (FBR) on Thursday gave a detailed briefing to the National Assembly Standing Committee on Finance about the recovery status and actions taken in offshore cases, referred to it by the OECD.
Pakistan had received the information from OECD in September last year – a month after the PTI came into power – but the agreement had been signed during the tenure of the Pakistan Muslim League-Nawaz (PML-N) government.
Former finance minister Asad Umar presided over the standing committee meeting who directed the FBR to also present the results of the Panama leaks and Dubai properties cases in the next meeting.
The extremely poor show appeared to be the outcome of raw nature of OECD information, lack of concerted efforts by the FBR and delay in empowering the offshore commissioners of the FBR who had been given powers just two weeks ago. A Rs1.64-billion demand had been raised against 19 persons and these cases were disposed of by recovering Rs883 million, Mohammad Ashfaq, Director General of Directorate of International Taxes of the FBR, informed the standing committee on Thursday.
In September last year, the OECD had shared information about over 152,000 bank accounts owned by Pakistani nationals with the tax authorities. The OECD information was exclusive of UAE. The FBR chairman said that Pakistanis who hold UAE Iqama are treated as UAE nationals and the UAE government has not provided information about them.
“We are working to break UAE Iqama barrier,” said FBR Chairman Shabbar Zaidi.
The OECD had provided information about 57,450 persons involving $7.5 billion deposits. Out of 57,450, majority of persons – 36,859 – own less than $100, which cannot be described as valuable information, according to the DG’s presentation.
But the FBR has focused on 378 persons who have over $1 million balance and own 78% of the reported total bank balance, said the director general. Out of 378 big cases, as many as 325 cases have been referred to the FBR’s offshore commissioners for proceedings while 53 persons still remain untraceable, said Ashfaq.
The FBR headquarters referred 453 cases to the offshore commissioners for action and came to know that 187 of them have availed the tax amnesty scheme, said the DG. As many as 115 persons availed the PML-N’s tax amnesty scheme and 72 availed the PTI’s tax amnesty scheme.
Cases which have $100,000 and above constitute 3.44% of the total number of cases but involve 94.4% of the reported account balance, Ashfaq informed the standing committee.
The 247 are the potential cases that have to answer the FBR’s questions about sources of their funds, said Zaidi. His assumption was that these 247 cases were either not eligible to take benefit from the tax amnesty schemes or they might have legal means for having offshore assets.
Zaidi said that the FBR offshore commissioners have been given end October deadline to take action in these 247 cases. The 2018 cases remain pending as the FBR is set to receive fresh information from 80 countries next month.
“The recovery of assets stashed abroad was the high priority of Prime Minister Imran Khan,” observed Asad Umar. Recovering $200 billion, presumably stashed in Swiss banks, was one of the election slogans of Prime Minister Imran. Former finance minister Ishaq Dar had first claimed that $200 billion was parked in Swiss banks by the Pakistanis. The OECD data was not actionable and it required lot of efforts to identify the persons, said Ashfaq. He said that the accountholders gave wrong addresses and there were also duplications.
There are other 1,605 persons who have bank balances in the range of $100,000 to $1 million and own 16.25% of the total reported balance.
Ashfaq said that Pakistan has been appreciated in OECD Competent Authorities Meeting held in Paris last month as one of the most active jurisdictions in operationalising the Common Reporting Standards data.