FBR contemplating revising local tax laws

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ISLAMABAD: The Federal Board of Revenue (FBR) is contemplating changing tax laws via Finance Bill 2018 to revise restrictions in local tax statute and absence of obligatory disclosure requirements of Pakistani nationals in respect to their income and overseas assets.

The revisions in local tax statute are being considered for change to allow prescribed time limitations on amend/reopen tax assessments to be opened, reported Business Recorder.

In a report submitted to the apex court, FBR stated the two major challenges regarding limitations which include obligatory disclosure requirements of Pakistani nationals relating to their foreign assets/income, would likely be added to Finance Bill 2018.

According to the report, the FBR is keen to initiate automatic exchanges of financial accounts information under OECD umbrella, but the clause of confidentiality regarding tax information received from other countries cannot be undermined.

The tax regulator in its defence stated it had started the process of scrutinizing individuals named in Panama leaks professionally but intended outcomes couldn’t be achieved due to restrictions in local tax statute, specifically linked to time limitation to amend/reopen a completed tax assessment and obligatory disclosure requirements of Pakistani nationals in respect to their income and overseas assets.

Second reason mentioned as cause of hindrance in FBR investigations was related to legal framework mechanisms which bind foreign jurisdictions to exchange information with Pakistan, weren’t also available.

The first hindrance could be removed by making necessary changes to local laws and may be a part of Finance Bill 2018. However, the second limitation is due to inking of several multilateral tax conventions, agreements and revising articles on exchange of information in current tax treaties.

 

 

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