TI tells NAB to probe tax evasion
ISLAMABAD: Transparency International (TI) has urged the National Accountability Bureau (NAB) to investigate evasion of tax, and call for information about the Pakistani investors who have succeeded to transfer Rs430 billion investment on the purchases of properties during the year 2013 and 2014.
In a letter written to NAB chairman, the TI has asked that Pakistan and UAE have signed Income Tax Convention on 17.2.1993, for double taxation, and under Article 27, NAB is authorised to call for information about the investors from Pakistan from the government of UAE.
The mandate of NAB is clearly stated in the preamble of NAO 1999, which is to provide for the setting up of NAB to eradicate corruption and corrupt practices and hold accountable all those accused of such practices and matters ancillary thereto.
Pakistanis are allowed to buy overseas properties; however, they must declare it in their Wealth Tax Form in the annual Income Tax Return.“In case the news report is correct, and even half of the property owners have not declared their properties in IT Return, Pakistan can lose a minimum of 10% tax on 8 billion dirhams, which works out to be Rs21.5 billion, and kindly note that it is only for purchase made in one year 2013/15,” the TI mentions in its letter.
As per the Income Tax Convention signed between the two countries, the competent authorities of the contracting states shall exchange such information (including documents) as is necessary for carrying out the provisions of the convention or of the domestic laws of the contracting states concerning taxes covered by the convention.
Similarly, the Income Tax Convention also says that the exchange of information or documents shall be either on a routine basis or on request with reference to particular cases or both. The competent authorities of the contracting states shall agree from time to time on the list of the information or documents which shall be furnished on a routine basis.
The TI has request the NAB chairman to examine the evasion of tax, and also how the investment of Rs430 billion was transferred from Pakistan, so that the sources of income can be checked and recoveries made from those who would not be able to justify the investment source.
