On Saturday, Federal Board of Revenue signed a treaty with Organization for Economic Cooperation and Development (OECD) that will allow them to retrieve information of Pakistani nationals’ offshore bank accounts for the past 15 years.
The basic purpose of this treaty is to fight against people who are dodging tax authorities and bring about justice. Through this treaty, not only tax defaulters can be identified but also those who are involved in corruption and money laundering.
“To combat offshore tax evasion through mutual administrative assistance with other parties to the convention.”
On the condition of anonymity, a senior official explained,
“The signatories of OECD convention on tax matters are obliged to provide last 15 years data of transactions and the domestic law will be amended to comply with the convention.”
This will help Pakistan in obtaining critical information because previously, the domestic laws allowed for 10 years data of taxpayers only and that too in Pakistan. The OECD agreement also authorizes concerned agencies in Pakistan to travel and examine the records about the individual in question.
It should be mentioned that in Paris on September 14th, Pakistan officially signed Multilateral Convention on Mutual Administrative Assistance in Tax Matters at OECD Headquarters. By signing it, Pakistan became the 104th country that is part of the jurisdiction in the convention. The treaty can take up to a year to implement, the official claimed.
There are 3 ways through which FBR can exchange information about taxpayers:
Information on request
Moreover, Pakistan also trying to include Swiss banks in this treaty as the country has faced constant struggle in obtaining records from Switzerland.
“In case Switzerland becomes signatory of the treaty, it will help the FBR access information directly from the Swiss banks.” – Source.