ISLAMABAD, Sept 27: The Securities and Exchange Commission of Pakistan (SECP) and the Central Board of Revenue (CBR) have constituted a joint task force on transfer pricing.
The task force would study pertinent issues concerning the accounting, measurement, reporting and allied matters on related party transactions and transfer pricing requirements and provide appropriate recommendations in this regard.
According to a statement issued here on Tuesday the task force would be headed by CBR former chairman Riaz Malik and would comprise Mujahid Eshai, Moin Fudda, Ikramul Haq, Kamran Mirza, Khalid Yaqoob and Shabbar Zaidi from the private sector, Salman Nabi from CBR and Ms Jaweria Ather from SECP as its members.
Syed Fayyaz Mahmud, Director SECP, would be the secretary of the task force.
The statement said that the task force would make necessary recommendations after analysing issues such as to which stakeholders were affected by transfer pricing and what were the differences between transfer pricing provisions contained in the corporate law (including listing regulations) and those in the tax law? How did one support the other? Which requirements of listing regulations and Fourth Schedule to the Companies Ordinance, 1984 pertaining to the related party transactions and transfer pricing, extended beyond lAS 24? Whether the information that was required beyond lAS 24 could be provided by corporate managements and was there a verifiable basis for providing such information?
It would also assess whether the auditors had the capacity to review and provide an opinion on the disclosures and procedures required by lAS 24, listing regulations and Fourth Schedule? Whether additional disclosures beyond lAS 24 and auditor’s certificate were required in other jurisdictions? If so, were such disclosures covered in the corporate legislation or the tax legislation or both in other jurisdictions? The task force would be submitting its report before December 31, 2005.
Disclosure and measurement requirements with regard to transfer pricing had been the focus of corporate entities and the regulators for some time now. Divergent views on this subject had been voiced by different stake-holders.
It had become necessary to resolve the issue in a pragmatic manner with input from the stake-holders, in both the private and public sectors.
The task force would welcome any suggestion from stakeholders and the public on the issues.
