ISLAMABAD - Switzerland has yet to ratify the revised convention on Avoidance of Double Taxation with Pakistan, which is delaying the exchange of information between the two countries.
The exchange of information between Pakistan and Switzerland was due to start from January 2018 under convention on Avoidance of Double Taxation between two countries. So far, the exchange of information has not been started between the two countries, as Swiss government has yet to ratify the agreement. Pakistan has completed internal procedures for ratification of the agreement, said an official of the Federal Board of Revenue (FBR). He further said that government’s departments do not have exact amount, which is stashed in Swiss banks.
In 2014, the then finance minister Ishaq Dar had informed parliament in writing that Pakistanis had stashed about $200 billion in Swiss banks.
Pakistan’s new government has announced to form a task force to scrutinize the whole details and would recommend ways and means to repatriate stashed amount running into billions of dollars. “First decision of Prime Minister Imran Khan’s cabinet is to form a task force to bring the laundered money back to Pakistan,” said finance minister in a media talk the other day. He further said that task force has been given two weeks time to present the strategy to bring back the looted money to the country.
The official informed The Nation that the revised treaty on the Avoidance of Double Taxation would not cover past transactions, which means that Pakistan could not do anything in bringing $200 billion what former Finance Minister claimed. “The scope of the revised treaty is limited to the transactions that would be carried out after Swiss government ratifies the agreement,” he added.
The FBR has recently clarified that Switzerland never, at any time, offered to return even a single dollar of Pakistanis deposited in Swiss accounts and Avoidance of Double Taxation Agreement (ADTA) between Pakistan and Switzerland is not meant for retrieval of assets. According to an announcement of the FBR, Switzerland never offered to return Pakistanis' assets stashed in its banks. In order to allay the misconceptions regarding Switzerland offering to return $200 billion, in 2014, under the Avoidance of Double Taxation Agreement (ADTA) with Pakistan, it is clarified that as per record available with FBR, Switzerland never, at any time, offered to return even a single dollar of Pakistanis deposited in Swiss accounts. The process to draft the agreement began in 2013 when he suggested the Finance Ministry revisit the 2005 treaty on avoidance of double taxation, particularly the clause regarding minimum exchange of information with respect to income tax.
Pakistan had approached Switzerland for incorporating the updated version of the Article on Exchange of Information based on the OECD Model.