Information exchange under STA should be confidential

Information exchange under STA should be confidential

The Federal Board of Revenue (FBR) has underscored the confidentiality of information obtained or shared under bilateral or multilateral agreements, as per the provisions outlined in the Sales Tax Act (STA), 1990.

This commitment to confidentiality is a key aspect of the FBR’s efforts to ensure the secure handling of sensitive tax-related information.

The FBR recently issued an updated version of the Sales Tax Act, 1990, incorporating amendments introduced through the Finance Act, 2021, effective until June 30, 2021. Section 56B of the Sales Tax Act, 1990, explicitly addresses the disclosure of information by public servants and emphasizes the confidential nature of the information acquired under the Act.

The text of Section 56B reads as follows:

“56B. Disclosure of information by a public servant.─ (1) Any information acquired under any provision of this Act shall be confidential, and no public servant shall disclose any such information, except as provided under section 216 of the Income Tax Ordinance, 2001 (XLIX of 2001).

(2) Notwithstanding anything contained in sub-section (1) and the Freedom of Information Ordinance, 2002 (XCVI of 2002), any information received or supplied in pursuance of bilateral or multilateral agreements with the government of foreign countries for the exchange of information under section 56A shall be confidential.”

This provision explicitly establishes the confidentiality of information obtained through the enforcement of the Sales Tax Act, 1990. It restricts public servants from disclosing any information acquired under the Act, with exceptions outlined in Section 216 of the Income Tax Ordinance, 2001. The Income Tax Ordinance serves as a reference point for permissible disclosures, ensuring that sensitive information remains protected and secure.

Additionally, Section 56B(2) highlights the special status of information received or supplied in accordance with bilateral or multilateral agreements with foreign governments for the exchange of information under Section 56A. Despite the provisions of the Freedom of Information Ordinance, 2002, any information exchanged as part of international agreements is deemed confidential.

This commitment to confidentiality is vital for fostering trust in international collaborations and ensuring the effectiveness of information exchange mechanisms. It reflects the FBR’s dedication to upholding international standards of data protection and privacy, especially in the context of cross-border cooperation on tax-related matters.

As Pakistan engages in increased collaboration with foreign governments and international bodies to exchange information relevant to tax enforcement, the provisions outlined in Section 56B serve as a safeguard against unauthorized disclosures and protect the sensitive nature of the shared information.

The FBR’s adherence to these confidentiality provisions is a key element in building and maintaining robust international partnerships, promoting transparency, and upholding the principles of responsible information sharing in the realm of taxation.