ISLAMABAD: Despite the lapse of over four months, the country’s tax machinery is still reluctant to obtain information about Pakistani residents’ investment in offshore companies revealed in the Panama Papers or income obtained from such companies.
“No formal step has been taken so far under the tax laws regarding Pakistani residents who hold offshore companies as revealed by the Panama Papers,” a tax official told Media.
“Even no tax official in the Federal Board of Revenue is willing to talk on record whether there is any plan to investigate the matter to detect tax evasion or otherwise. I have not seen any development in this regard,” he said.
FBR spokesperson Dr Mohammad Iqbal could not be contacted for comments despite efforts.
Under the tax laws, the FBR is supposed to ascertain whether offshore companies owned by Pakistanis have been formed for legal business or for illegal purpose of tax evasion.
Like the FBR, the Securities and Exchange Commission of Pakistan (SECP), a corporate regulator, has also launched no formal investigation into the matter.
“We have not initiated any formal investigation into the matter,” SECP spokesperson Bushra Aslam told Media.
The FBR and the SECP administratively fall under the purview of the finance ministry, headed by Ishaq Dar, a close confidant of Prime Minister Nawaz Sharif.
According to FBR explanations submitted in the form of a document to the National Assembly, if a Pakistani resident has shifted his after-tax money from the country and formed an offshore company in a foreign country for a legal business, it is not an illegal act.
Contrary to this, if a Pakistani resident has shifted his hidden or untaxed money from the country through covert or illegal channels and formed an offshore company for avoiding tax or money laundering, it is an illegal act.
The FBR is yet to initiate an investigation to differentiate between offshore companies formed by Pakistanis after paying tax and without paying tax.
In the National Assembly’s Aug 10 session, PPP member Dr Nafisa Shah had sought details from Finance Minister Dar about steps taken by the government to investigate offshore companies of Pakistanis whose names had been revealed in the Panama Papers.
