Laws to be amended to put all debt-related responsibilities at one place

Published July 22, 2014
The government is reported to have assured the IMF to use anti-money laundering tools to combat tax evasion. — File image
The government is reported to have assured the IMF to use anti-money laundering tools to combat tax evasion. — File image

ISLAMABAD: The government has given an undertaking to the International Monetary Fund to amend the anti-money-laundering law and at least six other legislations and put together all debt-related responsibilities at one place by September this year.

Sources said the proposed amendments would be shared with an IMF mission by mid-August before tabling them in the National Assembly.

The government is reported to have assured the IMF that in order to enable the use of anti-money laundering tools to combat tax evasion it has already started preliminary work for including tax crimes in the schedule of offences of the 2010 Anti-Money-Laundering Act.

Committee to investigate allegation of tax evasion by MNAs

A list of serious tax offences is being prepared, says a written commitment given to the IMF. “In order to ensure that serious tax crimes are predicate offences to money-laundering, we will enact amendments to the relevant tax laws and submit amendments to the Anti-Money-Laundering Act to parliament by end-September 2014,” it said.


The proposed amendments will be shared with the IMF before tabling in the National Assembly


The laws to be amended include Income Tax Ordinance of 2001, the Federal Excise Act of 2005, the Sales Tax Act of 1990 and the Customs Act of 1969.

The government will ensure that the anti-money laundering framework is properly implemented to facilitate detection of potential cases of abuse of the investment incentive scheme to launder proceeds of crimes. Proper guidance will be provided by the Financial Intelligence Unit to financial institutions and the FBR. Moreover, the Anti-Terrorism (Amendment) Ordinance, 2013, will be enacted as a permanent law, in line with the action plan agreed with the Financial Action Task Force.

Besides, the government has committed to the IMF to enhance the effectiveness of public debt management operations. This will include diversification of financing requirements from both domestic and external sources under a medium-term debt strategy announced by the government in April this year.

The plan provides detailed guidelines to achieve desired composition of government’s debt portfolio, by setting preferences of the government with regard to cost-risk trade-off.

As part of the plan, the government intends to revamp the Debt Policy Coordination Office (DPCO) and make it a full-fledged and operational debt management office.

The Ministry of Finance will complete a report on skills-gap analysis of the existing DPCO by end-September with the assistance of multilateral agencies.

The government is in the process of hiring a professional director general to lead the DPCO and transform it into an operational debt management office.

The government has also assured the IMF that it will safeguard financial stability by strengthening the regulatory and supervisory framework. Specifically, a draft securities bill is being prepared and will be discussed with the IMF and then adopted by the end of December under a structural benchmark.

The revised SECP Act expected to enhance the regulatory powers of the Securities and Exchange Commission of Pakistan will also be discussed with the IMF, before being submitted to parliament by end-September.

The Futures Trading Bill is also being given final touches.

Meanwhile, a joint task force of the State Bank of Pakistan and the SECP has been meeting regularly for a few months to ensure coordinated supervision of financial groups. The SBP has shared its assessment with the SECP about consolidated financial position of conglomerates in the financial sector.

Published in Dawn, July 22nd , 2014

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