In a significant move aimed at curbing illicit financial activities and tax evasion, the Benami Transaction (Prohibition) Act, 2017 has brought about stringent penalties for those involved in benami transactions in Pakistan.
According to Section 51 of the Act, individuals engaged in such transactions could face rigorous imprisonment of up to seven years, coupled with fines amounting to 25 percent of the property’s value.
Under Section 51, Sub-Section 1 of the Act, a person involved in a benami transaction or holding benami property to defeat legal provisions, evade statutory dues, or avoid payments to creditors is deemed guilty of a benami transaction offense. This includes not only the beneficial owner but also the benamidar (the person in whose name the property is held) and any other individual who abets or induces such transactions.
Sub-Section 2 outlines the penalties for those found guilty of benami transactions. Offenders can face rigorous imprisonment for a term not less than one year, extending up to seven years. Additionally, a fine of up to twenty-five percent of the fair market value of the property will be imposed on the guilty party. This stringent punishment aims to serve as a deterrent against engaging in benami transactions, promoting transparency and accountability in property dealings.
Further reinforcing the commitment to combat fraudulent activities, Section 52 of the Act outlines penalties for providing false information. Any person or officer required to furnish information under this Act found to be providing knowingly false information or presenting false documents could face rigorous imprisonment ranging from six months to five years. Additionally, they may be liable to pay a fine amounting to ten percent of the fair market value of the property.
A critical aspect of the legal framework surrounding benami transactions is highlighted in Section 53, which mandates that no prosecution can be initiated against any individual under Section 51 or Section 52 without the prior sanction of the Board. This provision ensures that legal proceedings are initiated judiciously, with due consideration given to the evidence and the nature of the offense.
The introduction of these stringent penalties reflects the government’s commitment to combating tax evasion, money laundering, and other financial irregularities. By deterring individuals from participating in benami transactions, the authorities aim to foster a more transparent and accountable real estate sector.
Experts believe that the implementation of such stringent measures will contribute to the overall economic stability of the country. The legal framework surrounding benami transactions is expected to discourage individuals from engaging in fraudulent activities, thereby promoting fair business practices and enhancing the trust of investors and the public in the real estate sector.
The Benami Transaction (Prohibition) Act, 2017, has ushered in a new era of accountability and transparency in Pakistan’s real estate sector. The imposition of rigorous imprisonment and substantial fines underscores the government’s determination to tackle illicit financial activities and foster a business environment built on integrity and fairness.
