Bill to further empower FBR to tighten noose around undisclosed offshore assets

Bill to further empower FBR to tighten noose around undisclosed offshore assets

ISLAMABAD: Federal Board of Revenue (FBR) on Monday said that the proposals in the Finance Supplementary (Second Amendment) Bill, 2019 to further empower the revenue authority for tightening noose around undisclosed offshore assets.

The FBR in a statement said that it enjoys powers to raise immediate demand and effect recovery on provisional basis in case of government confiscated local assets under Section 123 of the Income Tax Ordinance.

The scope of this Section is proposed to be extended to discovery of undeclared offshore assets through the current Finance Bill.

“Now the demand and recovery of tax on such persons can be executed immediately after receipt of information in suitable cases,” the FBR said.

The measure is necessary to enable FBR to recover tax provisionally before the money moves out of bank accounts and the regular proceedings, which take about a year or two, follow.

FBR has further said that it can also request assistance in recovery of such taxes from foreign jurisdictions wherever it has bilateral and multilateral agreements.

This will ensure that FBR can request freeze of offshore accounts to other countries by conveying demand to such countries.

FBR is already in possession of information of bank accounts of Pakistanis from 26 countries and this provision will enable FBR to move swiftly in the direction of taxing people involved in holding of offshore assets.

As such, this measure has been introduced in addition to measures already available in Income Tax laws, Anti-Money Laundering Act and FIA/NAB laws and, in no way, precludes or overlaps the jurisdiction of such laws and institutions.

A new sub-section (1A) has been inserted to Section 123 of Income Tax Ordinance, 2001 through Finance Supplementary (Second Amendment) Bill, 2019, which was presented in the National Assembly.

According to the new sub-section:

“(lA) Where an offshore asset of any person, not declared earlier, is discovered by the Commissioner or any department or agency of the federal government or a provincial government, the Commissioner may at any time before issuing any assessment order under section 121 or amended assessment order under section 122, issue to the person a provisional assessment order or provisional amended assessment order, as the case may be, for the last completed tax year of the person taking into account the offshore asset discovered.”

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