The Federal Board of Revenue (FBR) has requested the United Arab Emirates’ Ministry of Finance to provide information of those Pakistanis who have sought UAE Iqama under Residence by Investment (RBI) schemes.
The revenue board, in its letter to the UAE’s Ministry of Finance, stated that such delinquent Pakistan tax resident persons have not only siphoned off funds out of Pakistan, but have also effectively circumvented the OECD-sponsored CRS exchange of bank and financial account information.
The UAE’s Ministry of Finance has so far not responded to any of the written requests made by FBR in this regard.
The FBR letter further stated that the automatic exchange of information (EOI) framework, in essence, was conceived and implemented to put up a well-coordinated and concerted global fight against organized tax theft and to inject transparency in the international taxes system.
In the Pakistan-UAE meeting on EOI held in Dubai on October 9-10, 2019, a commitment was made to come up with a detailed formal response in this regard. However, FBR received no reply whatsoever from UAE, while a few subsequent rejoinders issued by FBR also went unanswered, even unacknowledged.
“The UAE’s persistent silence on FBR’s efforts to develop a robust framework for sharing of structured information of Pakistani Iqama holders has not been productive so far, the letter stated. “The best inter-nation relationships are mutually responsive, symbiotic and empathetic, and are the product of superior diplomatic wisdom.”
FBR has requested UAE to provide a well laid out roadmap on UAE Iqama holders information. Alternatively, Pakistan would seriously consider rolling out appropriate measures, including the termination of Pakistan-UAE avoidance of double taxation agreement, at an early date.
Earlier in October, the UAE had agreed to share details of the properties owned by 500 Pakistani nationals that would provide valuable information to the tax machinery as it remained unable to effectively utilise the previous offshore information.
Both the countries had also agreed to renegotiate the Pak-UAE avoidance of double taxation treaty with an aim to help remove irritants in areas of taxation.