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Dar rules out easy access to billions in Swiss banks

19 September, 2014

ISLAMABAD: Finance Minister Ishaq Dar on Thursday ruled out possibility of the recovery of billions of dollars stashed in Swiss banks any time soon.

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ISLAMABAD: Finance Minister Ishaq Dar on Thursday ruled out possibility of the recovery of billions of dollars stashed in Swiss banks any time soon.

The minister said this in reply to a journalist's question that whether a memorandum of understanding on taxation signed with the United Kingdom could lead to availability of information on wealth of Pakistanis in the UK.

He was talking to journalists after signing of the MoU by the Federal Board of Revenue (FBR) and Revenue and Customs of the UK for exchange of information and cooperation on improvement in taxation and revenue collection.

The FBR Chairman, Tariq Bajwa, and the head of Department for International Development (DFID) in Pakistan, Richard Montgomery, signed the MoU.

Mr Dar and British High Commissioner Phillip Barton were present at the ceremony.

The minister did not speak much in reply to the question, but denied saying that Pakistanis had stashed $200 billion in Swiss banks, and the figures being quoted on the issue were just guesstimates.

He said many countries like the United States, the UK and others had consumed many years to reach agreements with Switzerland for exchange of data on wealth of their citizens in Swiss accounts and even they had not been able to recover any money.

He said the PML-N government had taken an initiative to hold talks with Switzerland for avoidance of double taxation.

The move would help bring into the tax net revenue that is lost to leakages. The process has been started recently and will take a couple of years to complete and hopefully an agreement will be signed during the tenure of current government.

He said he had started negotiations with Swiss authorities on avoidance of double taxation with the approval of the federal cabinet and then sent a team to Geneva for initial talks.

The minister said the FBR and its British counterpart had signed an agreement for mutual cooperation that would help former to improve its tax communication system and learn lessons from the British tax authorities regarding reforms in the taxation system.

In reply to a question, Mr Dar said protest sit-ins of Pakistan Tehreek-i-Insaf and Pakistan Awami Tehreek could not affect tax recovery despite their calls for civil disobedience and appeals to people not to pay taxes and utility bills.

He said tax authorities had been able to collect Rs319 billion in the first two months (July-August) of the current year despite protests and Eid holidays. This, he added, was 14.5 per cent higher than the collection of Rs279 billion made during the same period last year.

The minister, however, conceded that the government and the FBR would have to make aggressive targets for coming months to improve collection.

Mr Dar said the campaign against non-filers had started bearing results and notices issued to 120,000 non-filers had shown positive outcome. He said last year tax authorities had been able to collect Rs2,267 billion against a target of Rs2,275 billion.

The minister said remittances had also improved in the first two months of the current fiscal year and stood at $2.97 billion — 12.5 per cent higher than $2.64 billion during the same period last year.

But Ishaq Dar conceded that the sit-ins in Islamabad had delayed at least three major transactions worth $2.4 billion — launching of OGDCL bonds, Sukuk Islamic Bonds and the disbursement of a tranche by the IMF. However, he added, the government was still hopeful that the three transactions would be completed next month.

In reply to a question, British High Commissioner Philip Barton said his country was satisfied with policies of the Pakistan government. He said the UK fully supported democratic system and democracy in Pakistan.

Under the MoU, the UK will provide technical assistance to FBR over the next three years to help build its capacity and improve tax collection to support economic integration, stability and growth.

British experts would work with FBR to help achieve its tax targets by developing skills, knowledge and other resources essential for improving its performance in tax collection.

British advice would also be available to FBR on innovative solutions and measures to improve tax enforcement and reduce opportunities for tax evasion.

Specific areas of assistance include off-shore taxation, strategic communications and the use of information technology, particularly forecasting and analysing available information and assessing risk.

End.


 
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