FBR gets details of bank accounts holding more than Rs5m

ISLAMABAD: The banks have finally shared the details of accounts having more than Rs5 million in deposits with the Federal Board of Revenue (FBR) as the tax machinery puts together multiple data sources to nab maximum tax evaders.

Reporting this to the National Assembly’s Standing Committee on Finance and Revenue by FBR Chairman Shabbar Zaidi on Tuesday said the assets declaration scheme (tax amnesty) could not be extended beyond June 30 at any cost because the ­government was constrained by the IMF programme.

“We are constrained by a regime of a new [IMF] programme. Extension of date (for declaration of assets) is not viable,” he said in response to various questions from members of the national assembly. He declined to share the details of amounts so far collected under the scheme or the number of declarations. He said most of such declarations are normally filed by the people in the last week.

Chairman of the Standing Committee Asad Umar said the IMF executive board was due to consider Pakistan’s bailout programme on July 3 and the FBR was making it clear that amnesty scheme was not permissible under the IMF programme. He also declined to share any targeted revenues from the scheme saying “no target was set for the scheme. This is not a tax collection measure for FBR”. He said the scheme was introduced as a logical transition from the Benami Law passed in 2017 that became effective in February 2019 and envisaged confiscation of benami properties, accounts and assets.

Zaidi said the FBR was previously handicapped by resistance from banks in providing details of withholding taxes and did not want to create chaos for the financial sector but had now been able to resolve the issue amicably through the State Bank of Pakistan. “Now the banks are providing withholding details,” he said. “Today banks have also provided full withholding details of all the companies. We have succeeded without chaos or uproar,” he added.

He said the National Database and Registration Authority (Nadra) had opened e-Sahulat centres and within a couple of days the FBR would upload on its portal the data that would enable any taxpayers to check his/her details. He said the FBR was also securing data on more than one kanal of land holdings.

Another official said four large banks had provided the details of accounts having more than Rs5 million and more banks would follow within 24 hours.

He said there were more than 4.5 million accounts but a maximum of 1.2 million of them were registered taxpayers. He suspected that 25 to 30pc of these may be benami accounts. He said that only 43,000 out of 341,000 industrial consumers of electricity were paying sales tax while 3.1 million had commercial connections but their information was limited because most of them were described in the law as cottage industry consumers.

The committee expressed its apprehensions about amendments proposed by the government in Section 16 of Anti-Money Laundering (Amendment) Bill 2019 regarding the powers assigned to the investigating officer or any other officers of the agencies mentioned in sub section (2) of section 24 of the Anti-Money Laundering Act 2010 to arrest anybody suspected of being involved in money laundering.

The Ministry of Finance officials explained that the powers were being introduced to satisfy Financial Action Task Force, but MNAs said such draconian powers could not be given to IOs because these could be misused for anything, including political ­reasons. They demanded that certain ­safeguards be introduced like warrants or judicial permission.

The committee once again directed the finance ministry to propose maintainable alternative suggestions in light of the queries made by the members on the amendments proposed by the ministry.