Syed Sabeehul Hussnain

ISLAMABAD - The Federal Board of Revenue in a report submitted before the top court has stated that optimum results could not be achieved in the investigations proceeded against the individuals mentioned in the Panama Papers and other leaks.

The FBR described the reasons for its failure on two counts.

The first, the time limitation provided in domestic tax statute, while the second, the unavailability of legal framework mechanism, binding foreign jurisdiction to exchange information with Pakistan.

In its 124-page report, a copy of which is available with The Nation, the FBR has mentioned the details of individuals who are named in Panama Leaks, Paradise Leaks, Bahamas Leaks, Dubai Leaks and those maintaining account in other countries mostly tax havens.

Chief Justice of Pakistan Mian Saqib Nisar, after taking suo motu notice over maintaining of foreign accounts by Pakistani citizens without disclosing the same and paying taxes, had ordered the FBR to submit details with the top court.

In regard with Panama Leaks, the FBR managed to obtain a total of 444 individuals out of which addresses of 181 individuals were obtained from the International Consortium of Investigative Journalists (ICIJ).

For the remaining persons, the FBR approached the Nadra.

However, the Nadra has not provided the details and showed its inability stating, “it is intimated that the provided information is not enough to establish identity of individuals.”

The report further stated that it managed to obtain details of further 185 individuals from the Security and Exchange Commission of Pakistan (SECP) taking the total to 366.

According to the report, out of the 366 individuals notices could only be served to 293 individuals.

Out of the 293 individuals 232 were filers and 61 were non-filers.

“Even in respect of filers, share capital, investment, nature of businesses, subsidiary details, information regarding beneficial ownership was not available in their tax record,” the report stated about the 232 filers.

Remaining 78 individuals still remain unidentified.

Interestingly, the FBR, whose job is to at least maintain tax record, sought details from 366 individuals asking them as to whether they had disclosed their financial dealings abroad, in tax record of Pakistan.

Separately, the FBR stated that dates of incorporation of 162 entities had been obtained, while number of individuals having links in these 152 entities was 353.

The FBR stated that six cases had been finalised and a demand of Rs6.7 billion had been created out of which Rs6.62 billion had already been recovered. 

Interestingly, Rs6.2 billion was recovered from only two persons identified as Bashir Dawood and Maryam Dawood.

Regarding Paradise Leaks, total number of cases unearthed is 38, according to the report.

Of which 18 individuals are filers, 20 are non-filers.

The 20 individuals are issued notice under sections 114 and 116.

Likewise, returns enforced, consequent to notices issued to nine individuals, penalty notices issued to four individuals, penalty orders issued to two individuals and proceedings have been initiated against 16 individual filers.

Concerning properties in Dubai and UAE, the FBR report states that most of the individuals were filers.

It however, regarding the real estate investment in the UAE, added that the UAE Tax Authorities exchanged information of 53 Pakistani individuals.

The FBR claims that it approached nine foreign jurisdictions including the British Virgin Islands, Bahamas, Panama, Seychelles, Niue, Samoa, Mauritius, Jersey and Anguilla.

The Bahamas provided certain information; Seychelles and Samoa regretted that there was no Tax Information Exchange agreements.

A three-judge bench headed by Chief Justice Mian Saqib Nisar and comprising Justice Umar Ata Bandiyal and Justice Ijazul Ahsan on Tuesday hinted at the formation of a working group of financial experts to propose recommendations in order to curb money laundering.

During the course of the hearing, the chief justice observed that the court had bonafide intentions in order to strengthen country’s economy, adding that one must not perceive it as interference in the functioning of the parliament and the government.

Later in-chamber, governor State Bank, secretary finance and other financial experts who were summoned by the top court, gave briefing to the chief justice as to how menace of money laundering could be dealt with.

Law officer Waqar Rana told The Nation that the case of suo motu regarding maintaining of foreign accounts by Pakistani citizens without disclosing the same and paying taxes had been adjourned till Wednesday (today).