Islamabad: Organization of Economic Cooperation and Development (OECD) has warned Pakistan of failing to meet its international commitments of preventing tax evasion and the setting up of off-shore accounts for illegal wealth.
Pakistan had signed Convention on Mutual Administrative Assistance in Tax Matters, which provided a channel for sharing data regarding offshore account between the signatory countries. 104 countries are a signatory to this convention.
OECD warned Pakistan that the non-implementation of these demands would mean the country losing access to information on a reciprocal basis.
After signing this agreement, Pakistan was required establish six automatic exchanges of information (AEOI) across the country, reported a local newspaper.
According to official sources, AEOI zones have already been setup. An OECD team from its secretariat had paid a visit to Pakistan in July and recommended safety measures for the arrangement of data. Also, the OECD team had advised that record rooms be setup in every AEOI zone for data safeguard and confidentiality.
If the measures are found lacking, Pakistan will unable to receive any information of its own citizens bank accounts and assets in 104 countries. On the contrary. Pakistan would have to keep on sharing with these signatory countries on an automatic basis.
The plan envisaged was to have seen the establishment of the AEOI zones and local banks should have started sharing information for the duration of July 31st-December 1st.
This delay has been attributed to lingering delay in disbursement of funds for the setting up of AEOI zones. The source said that Finance Minister’s Ishaq Dar had kept the senior officials of Federal Board of Revenue busy in the court proceedings initiated against the former, which impacted the progress of work.
As per the agreement, data is required to be exchanged for non-residents opening bank accounts in Pakistan between July-December. No cash limitations exist on these bank accounts opened by non-residents in July-December period.
Bank accounts opened by non-residents before July having over $10,000 amount information will also be exchanged with OECD signatory members.
It will be mandatory for Pakistan to share data of non-residents with OECD treat members within a time span of nine months after completion of calendar year.
