No action taken on $8bn real estate investment in Dubai by Pakistanis: FIA

–Tax evasion is not corruption: Chairman FBR

–NA committee reiterates its demand from Dar to resign

ISLAMABAD: Federal Board of Revenue (FBR) Chairman Tariq Pasha has claimed that tax evasion is not corruption as there is a difference between avoiding tax and making money through illegal means.

Briefing National Assembly’s Standing Committee on Finance on investment in real estate in Dubai by Pakistanis here on Tuesday, he admitted that no action was taken against the investors as Pakistan cannot obtain detail from Dubai government as per the international law.

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The parliamentary committee had earlier asked officials of FBR, Federal Investigation Agency (FIA), National Accountability Bureau (NAB) and Securities and Exchange Commission of Pakistan (SECP) to give their viewpoint on transferring of funds to abroad illegally.

Committee member Asad Umar said that Pakistanis had illegally transferred around $ 8 billion to Dubai for purchasing properties during last four years. He said that State Bank of Pakistan (SBP), in a reply to query, has confirmed that permission of SBP is mandatory for an investment of $ 5 million and above abroad. According to the central bank, no Pakistani investor in Dubai had acquired permission from the bank. “I could not understand why the list of Pakistani investors in Dubai is not being provided by the concerned departments in Pakistan,” he said.

He said FBR must tell whether it had written any letter to Dubai government asking to provide the information related to investors in real estate sector.

However, the Chairman FBR surprised Asad by saying that obtaining such information is not possible under the existing international law. He admitted that FBR has no information about Pakistani investors in Dubai.

Tariq Pasha, however, claimed that Dubai government was yet to respond to a letter sent by FBR. The chairman FBR made members of the committee further surprised by saying that avoiding tax is not corruption. “Earning money through illegal means is actually corruption,” he said adding that tax evasion and corruption should be dealt differently.

On the other hand, representatives of FIA claimed that no action was taken against those who invested in real estate sector in the Arab country. “We have no case registered regarding the Pakistani investors in Dubai,” they said adding the agency cannot investigate a case until it is surfaced with credible evidence.

Later, Qaisar Sheikh, who chaired the committee’s meeting, constituted a three-member sub-committee headed by Dr Shezra Mansab Ali Khan Kharral, to investigate the issue of huge investment in Dubai by Pakistanis. Asad Umar and Isfandyar Bhandara would be members of the committee.

The committee also considered issues faced by real estate sector; it was pointed out by the ABAD chairman Arif Jeeva that anomalies existed in the valuation of immovable property in various areas of Pakistan.

“They were different values of properties that are hindering genuine real estate transactions,” Arif Jeeva said, “The DC rate is different, FBR value is separate and the transaction is made at market price.”

He said that we demand that tax rate be lowered and value be increased as per prevailing market rates.

FBR chairman acknowledged that anomalies in certain areas existed and assured necessary action will be taken in 2-3 weeks to rectify these anomalies with the consultation of stakeholders.

The committee was informed by NBP President Saeed Ahmed about the financial impact of the pension scheme up to December 31, 2016, was Rs 47.7 billion, which was almost 40-50 per cent of its total equity. He said that NBP was filing an appeal against the decision of apex court.

Members demand resignation from Dar:

Earlier members of the committee demanded again that finance minister Ishaq Dar should resign to uphold the integrity of the country at the international forum.

As committee chairman, Qaiser Ahmad Sheikh had been facing pressures from the members of the committee including some belonging to the ruling PML-N over low attendance and the continued absence of finance minister.

However, as the committee discussed policy issue over abolishment of ‘interests’ from the banking system, members pointed out that the matter needed input from the finance minister.

Asad Umar pointed out that the finance minister has never ever visited the National Assembly standing committee on finance.

Dr Nafis Shah said that Dar was busy in ‘Hudabiya mills case’ and demanded, “he should resign at least for the time being so that official machinery could perform well.”

Later talking to media after the committee Asad Umar said that the economy of the country was facing turbulence and there was a need for a focused approach to resolve the issues.

He added that the Dar should resign or the prime minister should take notice of it and appoint a new finance minister as he was facing serious charges and due to these charges including money laundering he could not proceed to Washington DC for the annual meeting of IMF and World Bank.

Meanwhile, MQM leader Rasheed Godil demanded committee chairman to write a letter to finance minister that he has remained absent from the committee for too long.

His demand was accepted by the committee chairman who directed the committee secretary to write a letter to the finance minister to appear at the next meeting of the standing committee.

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Ghulam Abbas
The writer is a member of the staff at the Islamabad Bureau. He can be reached at [email protected]
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