LAHORE  - Transparency International Pakistan (TIP) has requested Chairman National Accountability Bureau (NAB) to recover Rs430 billion Wealth Tax on Pakistani’s properties in UAE. A letter in this regard addressed to Chairman NAB and Secretary to Prime Minister said that reports published in media revealed that “Pakistanis purchased properties in Dubai worth over 16 billion UAE Dirham during 2013 and 2014 as compared to over 36 billion Dirham purchases made by the Indians.
TIP also requested the Chairman to examine the evasion of Tax, and also how the investment of Rs. 430 billion was transferred from Pakistan, so that the sources of income can be checked and recoveries made from those who would not be able to justify the investment source.
As an incentive to informers, NAB may also announce reward for those who identify any illegal property, or Benami properties out of Rs 430 billion worth Pakistani’s properties in UAE, the letter added.
The National Accountability Bureau is Pakistan’s apex anti-corruption organisation. It is charged with the responsibility of elimination of corruption through a holistic approach of awareness, prevention and enforcement.
The mandate of NAB is clearly stated in the preamble of NAO 1999, which is to provide for setting up of a National Accountability Bureau so as to eradicate corruption and corrupt practices and hold accountable all those persons accused of such practices and matters ancillary thereto.
This is to inform NAB that Pakistanis are allowed to buy overseas properties; however, they must declare it in their Wealth Tax Form in the annual Income Tax Return. In case the reports are correct, and even half of the property owners have not declared their properties in IT Return, Pakistan can collect minimum 10pc tax on 8 billion Dirham, which works out to be Rs 21.5 billion, and it is worth mentioning here that it is only for purchase made in one year 2013/15. Pakistan and UAE have signed Income Tax Convention on 17.2.1993, for double taxation, and under Article 27, NAB is authorised to call for information about the investors from Pakistan from government of UAE.
Article 27 speaks, 1.“The competent authorities of the Contracting States shall exchange such information (including documents) as is necessary for carrying out the provisions of the Convention or of the domestic laws of the Contracting States concerning taxes covered by the Convention, in so far as the taxation there under is not contrary to the Convention, in particular for the prevention of fraud or evasion of such taxes”.
2. The exchange of information or documents shall be either on a routine basis or on request with reference to particular cases or both. The competent authorities of the Contracting States shall agree from time to time on the list of the information or documents which shall be furnished on a routine basis.