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KARACHI: The Federal Board of Revenue (FBR) is planning to approach Swiss authorities in order to retrieve billions of dollars in black money that were transferred by Pakistani individuals and corporate entities to Switzerland, sources said on Monday.
“The revenue body will make use of the Avoidance of Double Taxation Treaty with Switzerland for acquiring information about Pakistanis maintaining accounts in Swiss banks,” said an FBR official on the condition of anonymity.
The source said that the above mentioned information could be obtained as the Swiss Parliament had passed the landmark ‘Return of Illicit Assets Act, 2010’ bill, enabling developing economies to recover billions of dollars of black money transferred by individuals and corporate entities to that country.
The source further said that after the enactment of the legislation it was possible to retrieve money from Switzerland under article 25(1) of the avoidance of double taxation treaty between Pakistan and Switzerland, which clearly makes it obligatory on Switzerland to provide information regarding Pakistanis maintaining accounts in Switzerland.
Article 25(1) of the tax treaty between Pakistan and Switzerland says: “The competent authorities of the contracting states shall exchange such information (being information which is at their disposal under their respective taxation laws in the normal course of administration) as is necessary for carrying out the provisions of this convention in relation to the taxes which are the subject of this convention.”
FBR sources said that the revenue body was also considering establishing a dedicated cell to obtain data from the Swiss authorities. Recently, countries such as the US, UK, Germany, Argentina, Mali, Mexico, Kazakhstan and India had approached the Swiss authorities for exchange of information.
Tax practitioners welcomed the FBR initiatives for retrieving tax on black money.
Advocate Supreme Court Dr. Ikramul Haq said that inside the country, people were required to declare their total world income and claim tax credit on any doubly taxed income.
“But the plunderers and looters of national wealth have illegally placed huge funds in Swiss banks that remain untaxed in Pakistan,” he added.
Haq said that illicit assets with the Swiss banks also include money on which tax was not paid. He said that on authentication of information provided by a country, the Swiss authorities can deduct the tax and remit the same to the applicant country.
There are no exact figures for black money deposited in Swiss banks but experts believed that billions of dollars could be retrieved in taxes from Swiss banks. “The FBR can retrieve about $15-20 billion in taxes on money deposited in Swiss banks,” said Haq.
According to data compiled from various sources, the details of amounts recovered from Switzerland include: US $780 million; Nigeria $700 million; Philippines $680 million; Peru $180 million; Kazakhstan $84 million.
Reports suggest that the Income Tax Department of India also approached the Swiss authorities for exchange of information with regard to a number of individuals who deposited sums in Swiss banks.
“The revenue body will make use of the Avoidance of Double Taxation Treaty with Switzerland for acquiring information about Pakistanis maintaining accounts in Swiss banks,” said an FBR official on the condition of anonymity.
The source said that the above mentioned information could be obtained as the Swiss Parliament had passed the landmark ‘Return of Illicit Assets Act, 2010’ bill, enabling developing economies to recover billions of dollars of black money transferred by individuals and corporate entities to that country.
The source further said that after the enactment of the legislation it was possible to retrieve money from Switzerland under article 25(1) of the avoidance of double taxation treaty between Pakistan and Switzerland, which clearly makes it obligatory on Switzerland to provide information regarding Pakistanis maintaining accounts in Switzerland.
Article 25(1) of the tax treaty between Pakistan and Switzerland says: “The competent authorities of the contracting states shall exchange such information (being information which is at their disposal under their respective taxation laws in the normal course of administration) as is necessary for carrying out the provisions of this convention in relation to the taxes which are the subject of this convention.”
FBR sources said that the revenue body was also considering establishing a dedicated cell to obtain data from the Swiss authorities. Recently, countries such as the US, UK, Germany, Argentina, Mali, Mexico, Kazakhstan and India had approached the Swiss authorities for exchange of information.
Tax practitioners welcomed the FBR initiatives for retrieving tax on black money.
Advocate Supreme Court Dr. Ikramul Haq said that inside the country, people were required to declare their total world income and claim tax credit on any doubly taxed income.
“But the plunderers and looters of national wealth have illegally placed huge funds in Swiss banks that remain untaxed in Pakistan,” he added.
Haq said that illicit assets with the Swiss banks also include money on which tax was not paid. He said that on authentication of information provided by a country, the Swiss authorities can deduct the tax and remit the same to the applicant country.
There are no exact figures for black money deposited in Swiss banks but experts believed that billions of dollars could be retrieved in taxes from Swiss banks. “The FBR can retrieve about $15-20 billion in taxes on money deposited in Swiss banks,” said Haq.
According to data compiled from various sources, the details of amounts recovered from Switzerland include: US $780 million; Nigeria $700 million; Philippines $680 million; Peru $180 million; Kazakhstan $84 million.
Reports suggest that the Income Tax Department of India also approached the Swiss authorities for exchange of information with regard to a number of individuals who deposited sums in Swiss banks.
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