Inside Financial Markets

Gifts worth over Rs 102 billions: FBR looking at details of 2,785 individuals

The Federal Board of Revenue (FBR) has informed the Senate Standing Committee on Finance that the Board is looking into details of 2,785 individuals who provided gifts of over Rs 102 billion in one financial year to evade taxes. A meeting of the Senate Standing Committee on Finance presided over by Senator Saleem Mandviwalla was briefed by FBR on Tuesday about the case of gift arrangements by 2,785 individuals through money laundering.

Senator Kamil Ali Agha of PML-Q stated that one individual has given gift in the range of Rs 500 million to Rs 1 billion which seems quite fishy and awkward. The committee was also briefed by chairman FBR Tariq Pasha regarding a case dealt in within the precincts of the Anti-Money Laundering Act and Combating the Financing of Terrorism (AML/CFT). The chairman stressed that FBR must not try cases of tax payers under the abovementioned Act.

The Senate Standing Committee on Finance directed Securities and Exchange Commission of Pakistan and State Bank of Pakistan to provide a reply about manipulation of shares of Punjab Bank in the next meeting. The chairman took up the issue of alleged manipulation of share prices by Bank of Punjab in order to offload shares and take 70 percent control of the Bank rights. The shareholder accused that bank management had purchased shares at Rs 8 and in a few months later sold them at Rs 12 per share. Shareholders suffered huge losses due to decrease in the price of shares, said Ali Nadeem, a shareholder who was also invited in the committee.

The committee after hearing the complaint of the shareholder directed the SECP and SBP to provide a reply in the next meeting. While considering a private member bill for amendment in the Financial Institutions (Recovery of Finances) Ordinance 2001, the panel was informed by the representatives of SBP that similar amendment was incorporated in one such bill. This led to withdrawal of bill by mover Senator Azam Khan Swati.

The committee also discussed the private member bill introduced by the chairman of the committee to bring about amendment in Protection of Economic Reforms Act, 1992. The meeting, after discussion, decided to send the recommendations to the Finance Division. The deputy governor State Bank of Pakistan briefed the committee about the current laws in the country to counter money laundering, loan default and other financial crimes. The committee was informed that more than 200 cases have been forwarded by the Finance Monitoring Unit (FMU) to Federal Board of Revenue (FBR).

Mandviwalla observed that the FBR had framed charges of money laundering against genuine businessman Bashir Dawood who also contacted to the committee and complained about it. Khawaja Tanveer Ahmed, newly appointed FBR Member Inland Revenue (IR) Operation said that the SBP framed these charges against the concerned businessman which was also upheld by the High Court after hearing both sides. “Now this case has been settled as the taxpayer deposited over Rs 6.2 billion into the national kitty and charges were withdrawn,” he added.

The senators were perturbed over FBR’s move for implicating businessmen into money laundering charges as they argued that they had opposed to include tax evasion as part of Anti-Money Laundering (AML) amended law during the last financial year and now the tax machinery started framing charges on the same grounds.

FBR Member IR Operation Khawaja Tanveer Ahmed assured the committee that there was nothing specific as the FBR was very particular about Anti-Money Laundering Law. He assured the committee that FBR could brief the committee in details about all cases related to money laundering. The meeting was attended among others by members including Ilyas Ahmed Bilour, Muhammad Mohsin Khan Leghari, Kamil Ali Agha, Saud Majeed and Muhammad Azam Khan Swati.

Baqar Hussain

A Wannabe CFO, just had stepped in the corporate sector, willing to explore every aspect here and learn as mush as i can, awareness for those who dont, get the info where ever possible and stay up to date always.

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)