Karachi: A list of 88 countries has been notified and issued by the Federal Board of Revenue on Friday for auto swapping of financial information of their citizens. Pakistan in 2016 became of the signatories to Organization for Economic Cooperation and Development’s (OECD’s) multilateral convention on mutual administrative assistance in tax matters, which can assist in regulating off-shore tax avoidance and evasion. This agreement will be enforceable from the next financial year starting next month.
Interestingly, the list has omitted the mention of countries like Panama and UAE, which has been used as a tax haven by rich Pakistani’s, although the name of Switzerland has although been included. From start of FY 2017-18 in July, Pakistan will be able to exchange financial information with 88 countries. The FBR has sent letters to the Securities and Exchange Commission of Pakistan and the State Bank of Pakistan requesting them to apprise banks and other financial institutions to share data of accounts linked to companies and residents of 88 nations.
FBR further stated in a letter to the SBP, that the due diligence for relevant financial accounts will start from the 1st of July. It added “As a result, reporting financial institutions are required to look through for controlling persons of such investment entities which are not located in participating jurisdictions. In such cases the reporting financial institutions will report on the controlling individuals who are reportable.”