ISLAMABAD - The Senate Standing Committee on Finance and Revenue once again failed yesterday to decide the fate of 'Anti-Money Laundering Amendment Bill' that would bring tax evasion and taxation offences into the ambit of AML.
Anti-Money Laundering Amendment Bill was tabled in the upper house of the parliament in 2014. The Senate's committee is yet to approve the bill, as members are not ready to include tax evasion as an offence under the AML bill. On the other hand, the government is not withdrawing the clause of tax evasion and taxation offences from AML following the commitments made with the IMF and other financial institutions.
Mohsin, an international lawyer, who was especially invited in the meeting, informed the committee that only tax fraud could be a part of Anti-Money Laundering Act, as all fiscal offences could not be brought under the ambit of this act. Ordinary tax evasion could not be brought under the AML Act, it would deal only with serious tax frauds, he added.
He went on saying that foreign assets accumulated with illegal means could also be questioned under the AML Act. However, committee chairman Senator Saleem Mandviwalla did not agree with this argument of the lawyer by saying, "Hundreds of thousand people have properties abroad, so how FBR will come to know people have made their assets legally or illegally".
He expressed concern on the issuance of notices by Federal Investigation Agency (FIA) to 400 people living abroad for explaining their source of income.
A senior official of the Federal Board of Revenue said that minimum threshold for income tax evasion would be at least Rs 10 million within the ambit of Anti-Money Laundering (AML) regime. Minimum threshold for sales tax and federal excise duty evasion would be Rs5 million under AML, he added.
He pointed out that before prosecuting under the proposed AML laws, two forums of Commissioners' Appeal and Appellate Tribunal would be exhausted. If these two appellate forums have confirmed the tax evasion for the purpose of money laundering, only then action could be taken against any person under the AML.
"We cannot approve the bill as per wishes of the government and IMF. It (bill) will be misused once approved. People will be arrested after the passage of AML Bill," said Senator Fateh Muhammad Hassani. He proposed to summon Minister of Finance, Governor State Bank of Pakistan and Chairman Federal Board of Revenue in next meeting to discuss one point agenda, Anti-Money Laundering Amendment Bill.
Additional Secretary Ministry of Finance Abdul Akbar Sharifzada admitted that there were international commitments on AML, which should be fulfilled.
Law consultant of the Ministry of Finance Muneeb Zia said that Financial Action Task Force (FATF) had made tax evasion a part of the AML in February 2013, which was according to the international standard. The countries like United States, United Kingdom, Australia and others had already included it.
He further said that FATF decisions would have to be enforced by all countries under the ambit of United Nations order.
The Senate committee also held the monthly progress review on the draft Corporate Rehabilitation Act (CRA). The committee was informed that Pakistan Bank's Association under the supervision of State Bank of Pakistan was in process of finalising the draft Corporate Rehabilitations Act. The PBA has so far held two stakeholder's consultations sessions in Karachi and Lahore on 27th August and 3rd September. Based upon the recommendations of the stakeholders, PBA will revise the draft Corporate Rehabilitations Act and will be sharing the same with the SECP.
The committee members said that banks should not introduce new bill instead they should give their recommendations, which should be incorporated in the existing bill. The committee also decided to call all relevant stakeholders in next meeting for further discussions.