The Senate Standing Committee on Finance was finally able to approve on 29th December Benami Transactions (Prohibition) Bill, 2016 aimed against holding property in benami transactions with some minor amendments and award for whistleblowers. The approval was possible after the Committee chaired by Senator Saleem Mandviwalla withdrew majority of its amendments, including reservations to allow a freehand to the government to have full access to any premises, place, account documents or computers to enforce any provision of the proposed Act. The Secretary Finance and the Chairman FBR argued that the proposed legislation cannot be implemented without having this power and such a provision already exists in all the laws, including customs, sales tax and the income tax, of the FBR. Senator Mandviwalla expressed his concern over misuse of provision but the government representatives insisted that sufficient powers have been incorporated in the proposed law to prevent misuse of the law and maintain a check. However, the government accepted the committee's suggestions to include a provision for whistleblowers with a reward to make the law more effective and limit the age to 65 years for appointment of serving or retired chairperson and member of the tribunal with a one-time three-year term. The SBP officials asserted that they had no objection to the powers of seeking information from a banking company but had reservations beyond that level. They insisted that the search of premises of a banking company "would create panic and we are trying to protect banks' reputation by opposing this clause." The Secretary Finance and the Chairman FBR, however, responded that the section specific to banking company in the proposed law was not different in any way from Income Tax and Customs laws. The SBP representatives were advised that they should inform their high-ups on the matter and inform the Committee about their views, if needed.

We feel that the approval of Benami Transactions (Prohibition) Bill, 2016 by the Senate Standing Committee is a clear indication that both the Senate and the National Assembly are on the same proverbial page and for good reasons so far as the holding of assets and properties under others' or fake names under Benami Accounts was concerned. Such a legislation was long overdue as such an unhealthy practice was quite prevalent in our system and had to be curbed with an iron hand to eliminate the practice of parking of illegal wealth in the form of assets and properties in the name of persons who had no capacity to earn it. It also needs to be noted that such assets were also generally earned through dubious practices and illegal activities and were hidden in benami transactions to avoid searches and probes by the government authorities. The proposed law would empower the FBR and other empowered authorities to conduct raids and check holdings of persons possessing wealth beyond their means or in the names of their spouses, children, parents or servants. Needless to add, that strict implementation of the proposed law would discourage undocumented economic activities, motivate the business community to operate in the formal sector and raise the tax revenues of the government. We also believe that the insistence of the Senate Standing Committee to include the whistle-blower concept in the proposal and the acceptance of this idea by the government would enhance the utility of the bill as such a provision would encourage individuals working within the organisations and banking companies to expose the wrongdoings committed within these entities and among their own ranks. However, a provision to discourage the whistle-blowers from unnecessary and uncalled for complaints also needs to be incorporated. This is so because sometimes, some disgruntled elements working in certain organisations make it a habit to complain against their employers on flimsy grounds if they are reprimanded for not doing their jobs properly. So far as SBP's objection is concerned, in our view, the central bank needs to be more strict with the banking companies in the matter of "knowing their customer" policy and discourage the banks to open benami accounts thoroughly rather than leaving an opportunity for the banks to indulge in such a practice. Anyhow, the proposed bill has still certain stages to pass through. Now that it has sailed through the Senate Standing Committee, it will be forwarded to the Senate for approval. If cleared, it will be sent back to the National Assembly for approval once again due to the amendments in the draft by the Senate. Nonetheless, as the major provisions of benami legislation have already been vetted and cleared by the legislature, there is no reason to suppose that it would be rejected at any stage. It could at the most take some more time but the bill is in the national interest and nobody could deny its benefits and usefulness in our environments.

Copyright Business Recorder, 2017