The Pakistan Business Council (PBC) has raised concerns over the Federal Board of Revenue’s (FBR) SRO 229(I)/ 2023, which requires companies and foreign investors to maintain records of beneficial owners, despite the comprehensive documentation already mandated by the Securities and Exchange Commission of Pakistan (SECP).
The PBC has written a letter to FBR Chairman Asim Ahmad to express the potential implications of this SRO on the corporate sector.
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The PBC has written a letter to the FBR Chairman, Asim Ahmad, expressing its concerns about the implications of this SRO on the corporate sector. The PBC has requested the FBR to withdraw the SRO, arguing that the Securities and Exchange Commission of Pakistan (SECP) has already mandated that companies maintain a record of Ultimate Beneficial Owners through the introduction of Section 123A of the Companies Act 2017 and through amendments to the Companies (General Provisions and Forms) Regulations, 2018 in the form of SRO 928(I)/2020, which includes new 19A – Additional Particulars of Ultimate Beneficial Owners.
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The SECP has put in place a comprehensive framework for companies to identify and report information on their ultimate beneficial owners, including the maintenance of a register containing specific particulars such as names, identification numbers, and dates of acquisition of shareholding or control.
The SECP’s SRO 928(I)/2020 requires companies to take reasonable measures to obtain information on ultimate beneficial owners of intermediary companies or other legal entities in the chain of ownership or control.
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The Pakistan Business Council (PBC) has expressed concern over the Federal Board of Revenue’s (FBR) SRO 229(l)/2023, which proposes to introduce a new chapter of ‘Record of Beneficial Owners’ for companies, despite the existence of SECP’s comprehensive requirements.
The PBC has written to the FBR Chairman requesting the immediate withdrawal of the SRO regarding the retention and provision of records of beneficial owners of companies.
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The PBC has pointed out that the proposed amendment in SRO 229(l)/ 2023 could have negative consequences on Pakistan’s business environment and foreign investment, particularly in light of the country’s efforts to improve its ranking in the World Bank’s Ease of Doing Business Report.
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The additional bureaucracy and burden on businesses resulting from the proposed amendment could be seen as a setback to these efforts. Moreover, complying with the SECP’s existing requirements is already a considerable undertaking, and the FBR’s proposal in SRO 229(l)/ 2023 is redundant and could double the work for companies.
The PBC has therefore urged the FBR to withdraw the SRO and to avoid any measures that could make it harder to do business in Pakistan.
