It is learnt that the issue of reporting of financial information with OECD member countries under bilateral agreement/multilateral convention, including agreements of avoidance of double taxation and prevention of fiscal evasion, was discussed in a recent meeting of the committee held at Parliament House.
Under Section 165B (furnishing of information by financial institutions including banks) of the Income Tax Ordinance 2001, every financial institution shall make arrangements to provide information regarding non-resident or any other reportable persons to the Board in the prescribed form and manner for the purpose of automatic exchange of information under bilateral agreement or multilateral convention. All information received under this section shall be used only for tax and related purposes and kept confidential.
Replying to the query raised by the Finance Committee, the FBR official said that there is a separate section regarding OECD which is not operationalised and even not challenged by the banks as yet. The section 107 of the Income Tax Ordinance 2001 deals with the agreements for the avoidance of double taxation and prevention of fiscal evasion while Section 165B deals with the furnishing of information by financial institutions including banks. The committee showed its satisfaction on the statement given by the Member (IR-Policy) and disposed of the matter.
Regarding current status of agreement for information sharing between FBR and commercial banks, the FBR Member (IR-Policy) informed the committee that an amendment in the Income Tax Ordinance, 2001, through Finance Bill, 2013, was carried out for obtaining information from banking companies regarding its customers and a new Section 165A was introduced in the said Income Tax Ordinance. He said that the commercial banks had filed writ petition in the High Courts of Lahore and Karachi contending the introduction of said section, however, the matter 'was decided in favor of the department, by the Lahore High Court but currently the stay was granted in the matter through the Intra-Court Appeal to the provision of said section. He said that Pakistan Banking Association also submitted some proposals regarding information of loans write-off which was already available on the bank's websites and suspicious transactions which were reported by the banks to the FMU and also for the enhancement of the payments limits of credit cards, the FBR official reportedly said.
The representative of the Federal Board of Revenue (FBR) informed the committee that as per previous direction of the committee, a focal person was appointed in order to get completion of pending ACRs of appraisers of Customs Department and their promotions were made in January 2016, against the vacant seats, therefore, the issue stand resolved. The committee expressed satisfaction over the statement given by the representative of the FBR and disposed of the matter.
The chairman committee raised the issue of promotion of superintendents in BS-17 of the Customs Department and said that the committee desired to resolve their issue at the earliest. The FBR representative informed the committee that on the direction of the Establishment Division, the superintendents of the Custom Department were granted time scale promotions against which they demanded their regular promotions. He said that the said issue was discussed in a previous meeting of the committee in which it was informed that there was no objection from the FBR with regard to regular promotions subject to approval of the Establishment Division.
While giving briefing to the committee, the special secretary Establishment Division said that the FBR is making promotions for three cadres in BS-I7 which included superintendents and appraisers. He said that it was a complete case and not separately related to appraisers and the subject matter of up-gradation was related to the Finance Division. He further said the promotion to the said cadre was accordingly made but the specific formula was different. On the suggestion of Member I-R Policy, FBR, the committee directed the FBR to hold a meeting with all stakeholders/victims of the Custom Department to resolve their issue of up-gradation for a final decision within one month. A compliance report in that regards may be provided to the committee by the 31st December, 2017, positively.
Copyright Business Recorder, 2017