ISLAMABAD - The Federal Board of Revenue on Wednesday said that a large number of Panama nominees were not responding to the notices issued by FBR asking about different information, as only 94 out of 303 people had responded so far.

The FBR found 444 cases under Panama leaks and it traced 303 addresses. Later on, notices were issued to 303 people since September 1, 2016 under Income Tax Ordinance 2001, section 176, asking about different information, said FBR Chairman Nisar Khan in National Assembly’s Standing Committee on Finance and Revenue, which met here with MNA Qaiser Ahmad Sheikh in chair.

Giving further details, Khan said that FBR had received 94 responses in this regard, so far. Of which, 33 have sent their adjournment request saying their company was dormant, shares sold or the owners were non residents. He further said that 14 out of total 303 had admitted having their companies abroad and 17 out rightly denied. Chairman, FBR ensured the committee that FBR will do its job with devotion and honesty without any discrimination.

Talking about the action, the official of FBR informed that they had also issued the reminders to those who were not responding. The FBR would issue penalty notices to them if they did not respond. Around Rs25,000 will be imposed on first default and Rs 50,000 for each subsequent default.

Securities and Exchange Commission of Pakistan Chairman Zafar Hijazi informed the committee that SECP had provided required information to FBR about the companies registered with SECP. He said that SECP was regulator for inland companies only and SECP had no concern with foreign companies. The SECP has issued directions to the local companies for providing details of their companies registered abroad in the name of same directors.

He further said that there were around 73,000 companies registered with the SECP of which it had pinpointed these 444 companies. Out of these 444, 280 had investment abroad and the commission had sent the names of 155 directors of these companies to the finance ministry. Of these companies, 36 were public listed companies and 16 had foreign investments in jurisdictions other than Panama.

The State Bank of Pakistan’s (SBP) deputy governor informed the committee that SBP had no role with regard to the Panama Papers.

The committee considered “The Tax Laws (Amendment) Bill, 2016 (Ord. No V of 2016)”. The chairman FBR briefed the committee about the salient features of the said bill. He said that in order to establish parity between conventional TFCs and Shariah compliant companies, the bill had proposed to grant similar tax concessions and incentives to the Shariah compliant companies. He added that The Tax Laws (Amendment) Bill, 2016 (Ord. No V of 2016) sub-section (4) was inserted in section 236C by providing exemption from the application of this section to the dependents of Shaheeds belonging to Pakistan Armed Forces and those who die, while in the service of the Pakistan armed forces or federal and provincial governments. He further stated as the language of this sub-section was misinterpreted and intended scope was being enlarged. Therefore, it is proposed to redraft this sub-section as to clearly manifest the intended scope of this provision. After detailed discussion the committee recommended that “The Tax Laws (Amendment) Bill, 2016 (Ord. No V of 2016)” may be passed by the National Assembly.

The committee also considered the “The Limited Liability Partnership Bill, 2016” and recommended that said bill may be passed by the National Assembly. The committee also considered the “The Income Tax (Amendment) Bill, 2016” (Ordinance No. XLIX of 2001). Chairman, FBR apprised the Committee about the main purposes of the bill. He said that prior to Finance Act, 2016; fair market value for the purpose of probing the source of investment in acquisition immovable property was determined by the commissioner. After a number of meetings with business community and various associations, Pakistan Federation of Chambers of Commerce and Industries and Chambers of Commerce of all the four provinces, it was agreed that instead of valuation to be made by approved valuers of State Bank of Pakistan, The FBR will notify fair market valuation table itself after consulting all stake holders. The members were of the opinion that in principle it was a good decision by the government. However, the committee members showed their concern about the valuation procedure proposed by the government. Therefore, it was decided by the committee that the honorable members would send their recommendations for onward submission to FBR, and FBR would revisit the bill accordingly. The committee also decided that said bill would be considered in its next meeting. The committee decided that all stakeholders would be invited in the meeting.

The meeting was attended by Saeed Ahmed Khan Manais, Rana Shamim Ahmed Khan, Daniyal Aziz, Muhammad Pervaiz Malik, Sardar Muhammad Jaffar Khan Leghari, Sheikh Fayyaz-ud-Din, Mian Abdul Mannan, Shaza Fatima Khawaja, Leila Khan, Dr Nafisa Shah, and Abdul Rashid Godil, MNAs and besides senior officers from Ministry of Finance & Revenue, SECP and SBP.