ISLAMABAD - The United Arab Emirates (UAE) is not providing a list of Pakistanis who have invested around $8 billion in Dubai’s real estate despite repeated reminders sent by the government of Pakistan. 

At a huddle of the National Assembly Standing Committee on Finance and Revenue, Pakistan Tehreek-e-Insaf MNA Asad Umar once again raised the issue of Pakistanis having invested $8 billion in UAE real estate without getting approval from the State Bank of Pakistan (SBP). He said that the $8 billion has been transferred to the UAE by the Pakistani residents or overseas Pakistanis through illegal ways.

“The Federal Board of Revenue (FBR) has taken up the matter with UAE tax authorities time and again. The UAE authorities have been requested, both directly as well as through the Ministry of Foreign Affairs, for providing the list of Pakistanis having invested in the UAE release estate. However, no response has been received so far despite repeated reminders,” the FBR told the committee in a written reply. 

The FBR further said that the federal cabinet had also approved a summary to initiate negotiations with the UAE to develop a mechanism for the exchange of information through a protocol in view of article 27 of the existing avoidance of double taxations agreement between the two countries. However, the UAE authorities have so far not provided the choice of venue and dates for the negotiations.

Meanwhile, the SBP has not granted any permission to any individual or company for the acquisition of property in the UAE or any other country.  Similarly, the Federal Investigation Agency (FIA) said that they had not initiated any inquiry against Pakistanis having invested in Dubai. “Normally, the FIA deals with a case related to corruption against federal government’s employees or a case of embezzlement in public funds,” an FIA official said.

Asad Umar was disappointed with the replies of the government departments. He said that the people from all professions had purchased properties in Dubai.

Later, the committee decided to constitute a sub-committee to probe the matter in details. Dr Shezra Mansab Ali Khan would head the subcommittee while Asad Umar and Isphanyar M Bhandara would be its members. 

National Bank of Pakistan (NBP) President Saeed Ahmed informed the committee about the financial impact, workout by the Actuaries of Pension Scheme up till December 31, 2016, which was Rs47.7 billion including in-service beneficiaries as well as retired employees of the bank. He said that impact of the court decision will also have an adverse effect on the foreign operation of the bank. He added the bank was also planning on opening a branch in China and for this purpose, the bank should be equivalent to US$15 billion (Rs1.6 trillion). However, the revised ratio will not be able to meet the stated minimum leverage ratio and CAR requirements. He also informed the committee that the bank has decided to file review a petition in this regard. The committee members expressed their concerns about the policies of the NBP, however, appreciated the role of present management for making their efforts to put the things in the right direction.

While considering the matter regarding the issues being faced by the real estate sector, it was pointed out by the Association of Builders & Developers (ABAD) chairman and Pakistan Real Investment Forum (PREIF) president that certain anomalies have existed in the valuation of immovable property in various areas of Pakistan. They were of the view that the said anomalies were hindering genuine real estate transactions.

The FBR chairman acknowledged that anomalies in certain areas existed. He assured the committee that necessary action will be taken in two to three weeks to rectify the anomalies with the consultation of stakeholders. It was also pointed out by the real estate stakeholders that those investors, who use banking channels for real estate transactions up to full market value of the property, were facing harassment from various government departments. However, the FBR chairman said that such harassment, if any, will not be allowed in real estate transaction for the better interest of the investors. The committee recommended that the upper limit should be removed, which was imposed in Income Tax Act, 2016 (Section 236-W).

The SBP deputy governor briefed the committee about the process of the letter of credit (LC) between Pakistan and Iran. He said that federal cabinet has already approved the matter, however, the delay was on the part of the government of Iran. The committee directed to expedite the matter for the better interest of the country. The SBP deputy governor assured the committee that it would be decided on a priority basis.

FBR Chairman Tariq Pasha informed the committee that the FBR has achieved the target of up to Rs3368 billion during the last fiscal year 2016-17. He also informed the committee that the FBR has achieved its first quarter (July-September) targets for the year 2017-18.  The committee appreciated the role of the FBR chairman in this regard. The Securities and Exchange Commission of Pakistan (SECP) acting chairman briefed the committee about the current situation in the stock market. He said that being a regulator, the SECP was closely watching the situation in the market by protecting the investors.

However, the UAE authorities have so far not provided the choice of venue and dates for the negotiations.

Meanwhile, the SBP has not granted any permission to any individual or company for the acquisition of property in the UAE or any other country.  Similarly, the Federal Investigation Agency (FIA) said that they had not initiated any inquiry against Pakistanis having invested in Dubai. “Normally, the FIA deals with a case related to corruption against federal government’s employees or a case of embezzlement in public funds,” an FIA official said.

Asad Umar was disappointed with the replies of the government departments. He said that the people from all professions had purchased properties in Dubai.

Later, the committee decided to constitute a sub-committee to probe the matter in details. Dr Shezra Mansab Ali Khan would head the subcommittee while Asad Umar and Isphanyar M Bhandara would be its members. 

National Bank of Pakistan (NBP) President Saeed Ahmed informed the committee about the financial impact, workout by the Actuaries of Pension Scheme up till December 31, 2016, which was Rs47.7 billion including in-service beneficiaries as well as retired employees of the bank. He said that impact of the court decision will also have an adverse effect on the foreign operation of the bank. He added the bank was also planning on opening a branch in China and for this purpose, the bank should be equivalent to US$15 billion (Rs1.6 trillion). However, the revised ratio will not be able to meet the stated minimum leverage ratio and CAR requirements. He also informed the committee that the bank has decided to file review a petition in this regard. The committee members expressed their concerns about the policies of the NBP, however, appreciated the role of present management for making their efforts to put the things in the right direction.

While considering the matter regarding the issues being faced by the real estate sector, it was pointed out by the Association of Builders & Developers (ABAD) chairman and Pakistan Real Investment Forum (PREIF) president that certain anomalies have existed in the valuation of immovable property in various areas of Pakistan. They were of the view that the said anomalies were hindering genuine real estate transactions.

The FBR chairman acknowledged that anomalies in certain areas existed. He assured the committee that necessary action will be taken in two to three weeks to rectify the anomalies with the consultation of stakeholders. It was also pointed out by the real estate stakeholders that those investors, who use banking channels for real estate transactions up to full market value of the property, were facing harassment from various government departments. However, the FBR chairman said that such harassment, if any, will not be allowed in real estate transaction for the better interest of the investors. The committee recommended that the upper limit should be removed, which was imposed in Income Tax Act, 2016 (Section 236-W).

The SBP deputy governor briefed the committee about the process of the letter of credit (LC) between Pakistan and Iran. He said that federal cabinet has already approved the matter, however, the delay was on the part of the government of Iran. The committee directed to expedite the matter for the better interest of the country. The SBP deputy governor assured the committee that it would be decided on a priority basis.

FBR Chairman Tariq Pasha informed the committee that the FBR has achieved the target of up to Rs3368 billion during the last fiscal year 2016-17. He also informed the committee that the FBR has achieved its first quarter (July-September) targets for the year 2017-18.

 The committee appreciated the role of the FBR chairman in this regard. The Securities and Exchange Commission of Pakistan (SECP) acting chairman briefed the committee about the current situation in the stock market. He said that being a regulator, the SECP was closely watching the situation in the market by protecting the investors.