ISLAMABAD - A large number of Panama Papers nominees are reluctant to reply to the notices issued by Federal Board of Revenue (FBR) to explain their position even after passage of almost three months.

“Around 140 individuals have replied to the notices so far,” said an official of the FBR.

The tax department had issued reminders where replies were not received to notices u/s 176 of the Income Tax Ordinance, he said and added that next step would be to issue penalty notices u/s 182 if response could not be received till compliance date.

Sharing details of the penalties, the official said penalty amount in non-compliance cases was Rs 25,000 for first default and Rs 50,000 for each subsequent default. “We have also option of filing prosecution proceedings in trial court if someone is not responding to the notices,” he remarked.

The FBR had found 444 cases under Panama leaks and it traced 336 addresses. Later on, notices were issued to 336 people since September 1 under Income Tax Ordinance 2001, section 176. Addresses with respect to 108 individuals/entities are still missing. The notices were issued to verify the information with the FBR database.

In received replies, some of the people said their company was dormant, shares sold or the owners were non-residents. Few of them had admitted having their companies abroad and someone out rightly denied. The FBR also received response that the shares of offshore companies were sold. Some owners of these companies argued that the company was registered for international bidding where Pakistani companies were not encouraged, such as in Bangladesh, etc.

According to the details presented by FBR in National Assembly’s Standing Committee on Finance last month that some individuals in their replies said that offshore companies were dully reported in their income tax returns filed with the FBR. In other cases owners admitted offshore companies, but they argued that their status is non-resident and submitted proof to the FBR.

Names of a total of 444 Pakistanis had appeared on International Consortium of Investigative Journalists (ICIJ) website. These persons are officers or owners of 280 offshore companies mentioned in Panama Papers. Prominent among those who had been asked to explain their financial standings are Prime Minister Nawaz Sharif’s daughter Maryam Nawaz Sharif and sons Hussain and Hassan, Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan, PTI Secretary General Jahangir Khan Tareen and Aleem Khan. The FBR had also served a notice on Moonis Elahi, the son of Chaudhry Pervaiz Elahi.

The FBR has taken five months to send notices to the Pakistanis, whose names surfaced in Panama leaks for having offshore companies abroad. The FBR is the relevant department, which can investigate that what was the source of income of these people, whether they got approval before remitting the money abroad, was it legal money and had the beneficial owners paid due taxes on the income generated in Pakistan.