KARACHI: Banks have agreed to reveal details of their account holders to tax authorities in a deal inked this week to check suspected undocumented money in the banking channels, reported The News.
An agreement was reached at a meeting between Syed Shabbar Zaidi, Chairman Federal Board of Revenue (FBR) and chief executives of commercial banks on November 27, 2019 at the Large Taxpayers Unit (LTU) Karachi.
“The PBA (Pakistan Banks Association) has agreed to withdraw its petitions from the High Courts and also agreed to provide account holders information under section 165A (of the Income Tax Ordinance, 2001),” a source quoted in the report said. “It would enable the tax department to access real-time information of transactions made through the banking system.”
The media report claims that the banks had agreed to withdraw their petitions by next week. Section 165A was introduced to the main statute through Finance Act, 2013 but the implementation remained in litigation before the higher courts since then. Under Section 165A, the banks are responsible to provide details of financial transactions made by their account holders to the FBR.
Sources quoted in the report said the FBR chairman, at the meeting, said section 165A was amended in 2014, 2018 and recently through Supplementary Finance Amendment Act, 2019 on PBA’s recommendations.
The PBA and its members should not have any objection on the implementation of section 165A of Income Tax Ordinance, 2001,” Zaidi was quoted as saying in the publication.
As per law, the banks were bound to provide details of account holders. Those details included a list of persons making cash withdrawal of Rs50,000/day or over Rs1 million/month; deposits of Rs10 million/month; credit card payment of Rs250,000/month; and details of persons receiving profit on debt above Rs500,000/year.
The laws in Income Tax Ordinance, 2001 have superseded other laws, including Banking Companies Ordinance, 1962; the Protection of Economic Reforms Act, 1992; and Foreign Exchange Regulation Act, 1947, yet the banks were not providing the details on one pretext or the other.
The banking sector will suffer set back in coming days and unemployment will rise in coming days
Compliments to Chairperson FBR on the initiative to make transparency/accountability to the citizens. The transparency be extended to all users of commercial banks, micro finance payment banking, Debit Card withdrawls, of all micro finance banks, Pakistan Post Bank, Post bank transfers, remittances, etc.
Some years before the Financial Times Published stories of the Swiss Banking NDA details which would allow transparency to Swiss to provide access to Governments of the bearer of Swiss Accounts for information of deposits, which would be shared on official level with respective Governments. Trust the Government Pakistan has taking its rights for information of Pakistan nationals for the necessary intelligence admissible under respective laws.