KARACHI: Tax authorities will receive a huge bunch of financial transactions from banks after a court dispose of all the petitions that were restricting the tax authorities to obtain information.
Sindh High Court on Thursday disposed of petitions by banks. The disposal of cases has now allowed the Federal Board of Revenue (FBR) to obtain information of bank account holders making financial transactions in the undocumented economy.
The disposal of petitions came after an agreement signed between FBR and Pakistan Banks Association (PBA) on November 27, 2019.
The FBR sources said that the tax authorities would able to access the information of banking account holders. The FBR has been authorized to obtain information from banks under Section 165A of the Income Tax Ordinance, 2001.
This section was introduced through Finance Act, 2013. However the implementation of the section was remained subjudice before the courts for the last six years.
The FBR sources said that the section was introduced to detect persons having taxable income but remained outside of the tax net. They said that the disposal of the cases by the higher court would give boost to the broadening of tax efforts of the FBR.
The FBR will get following information under Section 165A:
(1) Notwithstanding anything contained in any law for the time being in force including but not limited to the Banking Companies Ordinance, 1962 (LVII of 1962), the Protection of Economic Reforms Act, 1992 (XII of 1992), the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the regulations made under the State Bank of Pakistan Act, 1956 (XXXIII of 1956), if any, on the subject every banking company shall make arrangements to provide to the Board in the prescribed form and manner,—
(a) a list of persons containing particulars of cash withdrawals exceeding fifty thousand Rupees in a day and tax deductions thereon, aggregating to Rupees one million or more during each preceding calendar month.”;
(b) a list containing particulars of deposits aggregating rupees ten million or more made during the preceding calendar month;
(c) a list of payments made by any person against bills raised in respect of a credit card issued to that person, aggregating to rupees two hundred thousand or more during the preceding calendar month;
“(d) a list of persons receiving profit on debt exceeding five hundred thousand rupees and tax deductions thereon during preceding financial year.”
(2) Each banking company shall also make arrangements to nominate a senior officer at the head office to coordinate with the Board for provision of any information and documents in addition to those listed in sub-section (1), as may be required by the Board.
(3) The banking companies and their officers shall not be liable to any civil, criminal or disciplinary proceedings against them for furnishing information required under this Ordinance.
(5) Subject to section 216, all information received under this section shall be used only for tax purposes and kept confidential.