Federal government makes major development towards documenting the economy

Federal government makes major development towards documenting the economy

Karachi: In a major development towards documenting the economy, banks have agreed on sharing details of tax holders with the official of the Federal Board of Revenue (FBR).

An agreement in this regard—between the tax authorities and the banks—was inked in the ongoing week.

An official told a media, “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). It would enable the tax department to access real-time information of transactions made through the banking system.”

Amidst this development, banks have agreed to withdraw their petitions by the next week.

It is pertinent here to mention that under Section 165A, the banks are responsible to provide details of financial transactions made by their account holders to the FBR.

Also, the same section was amended in 2014, 2018 and recently through Supplementary Finance Amendment Act, 2019 on PBA’s recommendations.

“Therefore, the PBA and its members should not have any objection on the implementation of section 165A of Income Tax Ordinance, 2001,” Chairman FBR Shabbar Zaidi was quoted as saying.

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.