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FBR hopes to get access to wealth stashed by Pakistanis in Swish banks
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FBR hopes to get access to wealth stashed by Pakistanis in Swish banks

ISLAMABAD: The Federal Board of Revenue (FBR) hopes a new agreement devised by Organization for Economic Co-operation and Development will enable it to access the assets of Pakistanis in Swiss banks.

The OECD provides a forum in which governments can work together to share experiences and seek solutions to common problems. OECD has devised Multilateral Competent Authority Agreement (MCAA) on Automatic Exchange of Financial Account Information.

“MCAA is a multilateral framework agreement, with the consequent bilateral exchanges coming into effect between those signatories that file the subsequent mandatory notifications and Article 6 of the MCAA specifies the details of what information will be exchanged and when,” sources at the FBR told Customs Today.

The sources said that the MCAA provided that subject to the applicable rules, partner jurisdictions will annually exchange the financial account information on automatic basis with each other. There are 102 countries and jurisdictions which have committed to 2017 or 2018 for the automatic exchanges of information, of which 96 countries have already signed the MCAA. Pakistan has signed the MCAA on June 7, 2017 and has committed to exchange information from September 2018 onwards.

“This will facilitate Pakistan to automatically receive information on financial accounts of its residents in due course of time from the other contracting states and jurisdictions which shall include Pakistan in the list of intended partners, including the Switzerland” the sources added.

The sources said that FBR had been able to put all the necessary tools in place in the last four years for obtaining information about the Pakistanis assets in other jurisdictions for tax purposes, including from Switzerland. These measures will now enable FBR to obtain information about Pakistanis’ money deposited in Swiss Banks and around the world for the purposes of taxation.

In December 2014, the source said that soon after the announcement made by the Finance Minister Ishaq Dar to bring back around $ 200 billion of Pakistanis from Swish Banks, Pakistan took up the matter with Switzerland for the second round of negotiations in order to settle the issues with mutual consent.

“The existing agreement did not provide any provision for the exchange of information between both the countries. Thereafter, Pakistan consistently approached Switzerland for the second round of negotiations” the sources maintained.

In April 2016, the Swiss authorities finally communicated their consent for the second round of negotiations” the source said adding that some two months afterwards, in June, 2016, the second round of negotiations was held and the Agreement was finalized with Switzerland which included the Article on exchange of information without giving away anything by Pakistan.

The sources said that the initial Agreement was signed in Pakistan with the Ambassador of Switzerland in March last year and federal cabinet ratified the revised Agreement and the internal procedure was completed in Pakistan in May last.