This is one of the major developments in seeking tax information of Pakistanis having Iqama (work permit) particularly in the UAE and other tax jurisdictions selling artificial residence to foreigners.
Sources said that OECD should pressurize these countries which are engaged in selling artificial residence to foreigners and avoid automatic exchange of information to other tax jurisdictions.
Pakistan government feels that the tax authorities are not getting adequate information about the Iqama holders from the UAE. Iqama holders get artificial residence in the UAE due to which, their accounts/balances and other tax related information is not shared with Pakistan, sources added.
In a communication to Secretary General OECD Angel Gurria, the adviser to the PM on finance has thanked the OECD for its invitation for the special plenary meeting of the Organization for Economic Cooperation and Development (OECD's) global forum on transparency and exchange of information for tax purposes scheduled for November 26-27, 2019 in Paris.
Pakistan is a significant beneficiary of the work done by the OECD towards bringing transparency in the international taxation through the exchange of actionable tax information, Hafeez Shaikh said.
He said that the Forum's latest work initiative on Residence by Investment (RBI) and Citizenship by Investment (CBI) schemes have been supported by a number of jurisdictions. The RBI and CBI schemes are misused by potential tax-evaders from all over the world to circumvent reporting of bank and financial account information under the Common Reporting Standards (CRS) thereby putting at risk the very integrity of the system that has been established by the international community with much efforts and investment.
"Pakistan is greatly interested in the outcomes of the said initiative as we may be one of the worst-hit nations by such schemes since some of the most revenue-potential CRS information of Pakistan tax-resident persons gets blocked by the jurisdictions concerned citing underlying RBI/CBRI regulations," Shaikh said.
Pakistan would, therefore, urge upon the Forum to complete the appraisal work on this initiative and finalize recommendations for the identified jurisdictions (and not their financial institutions, only) so that any menace to the CRS system could be neutralized, the adviser said.
Looking forward to continue working with the OECD, Pakistan reassures the OECD of full support of Pakistan towards the achievement of collective goal of making the taxation system ever more transparent, Shaikh added.
Sources told Business Recorder on Thursday that under the OECD framework, Pakistan seeks bank accounts information and data is exchanged every year in September. Last year, data from the UAE was very insignificant. When the data was scrutinized, it has been found that the UAE has not given information about Iqama holders Pakistanis to the tax authorities. These Iqama holders are artificial residents of Pakistan as well as UAE, whose information has not been available with the Pakistani tax authorities. "We are also working with other tax jurisdictions," they said.
Pakistan has taken three major steps to deal with this extremely sensitive issue. Firstly, the director general international taxes, FBR, has approached its counterpart in the UAE to take up the issue with their tax authorities. Secondly, a senior official is going to visit the UAE in the last week of September 2019, seeking information of Pakistani Iqama holders in the UAE. Thirdly, the finance minister has written a letter to the OECD to start crackdown against all the counties which are selling the artificial residence under the cover of Iqama.