ISLAMABAD – The Federal Board of Revenue (FBR) is anticipating a real-timesystem that would provide real-time data of all financial transactions fromall banks. The initiative will bring the untaxed economy under the tax netby identifying tax evasion.
Prime Minister Imran Khan had ordered the Ministry of Law and Justice,State Bank of Pakistan (SBP) to make necessary amendments to the bankinglaws. The amendments would share real-time data of banking transactionswith the FBR. The new amendments will be made a part of banking laws andregulations at the start of 2020.
Over the years, different laws have been enacted that bound banks toprovide FBR with the data of all the financial transactions. However, thebanks remain non-compliant with these laws citing different excuses.
The Finance Act 2013 incorporates clauses of information sharing into theIncome Tax Ordinance 2001.
According to Section 165-A of the Income Tax Ordinance 2001, all banks arebound to give information of account holders to the tax authorities.
Moreover, it also directs the banks to provide a list of individuals who:
– Withdraw cash of Rs. 50,000 per day – Withdraw cash of Rs. 1 million per month – Deposit Rs. 10 million per month – Make a credit card payment of Rs. 250,000 per month – Receive profit on debt above Rs. 500,000 per year
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Chairman FBR, Shabbar Zaidi, had also ordered banks to give the details ofbanking transactions voluntarily.
Despite necessary provisions in the banking laws and regulations, banksrarely provide the above-mentioned information to the tax authorities.
According to officials of FBR, due to lack of such information, untaxed andblack economy is flourishing in the country. The officials remain hopefulthat they will be able to get their hands on real-time data of all bankingtransactions.
As per SBP sources, as of 30th June 2019, there are 54.7 million bankaccounts in the country. Out of which, 7.6 million are yet to be verifiedbecause of the lack of details about them.
