ISLAMABAD: The National Assembly’s Standing Committee on Finance directed the Federal Board of Revenue (FBR) on Tuesday to arrange a briefing for the committee on investigations into offshore accounts of the people named in the Panama Papers.

The issue was raised by MNA Nafisa Shah at a meeting of the committee presided over by Qaiser Ahmad Sheikh.

Ms Shah asked FBR Chairman Nisar Khan whether the tax authority had launched any inquiry or investigation into the offshore accounts. “Do we have a proactive FBR to handle this issue?” she asked.

In reply to a question about properties purchased by Pakistanis in Dubai, FBR Member Dr Mohammad Iqbal said the FBR had been writing letters to the tax authorities of Dubai for four years for getting such information, but there was no response from them.

He said the FBR had also sought data from Dubai under the exchange of information provision of the avoidance of double taxation agreement, but to no avail. He said the FBR had also requested the Dubai tax authorities to hold a meeting on the issue of properties purchased by Pakistanis there.

The FBR chairman said the federal budget for 2016-17 would propose measures to plug loopholes in the taxation system to curb tax evasion after the recent disclosures of offshore companies held by Pakistanis.

BENAMI TRANSACTIONS: The committee also discussed the draft bill of Benami Transactions (Prohibition) Act, 2016.

FBR Member (for inland revenue) Rehmatullah Khan Wazir said the proposed legislation dealt with all Benami transactions held in or outside the country as the law would tax global income of people.

FBR Member Mohammad Iqbal said the Benami transactions were used as a tool to evade taxes in the country.

The committee also discussed the recommendations received from the Karachi Chamber of Commerce and Industry (KCCI), including addressing anomaly in the value-addition in sales tax on imported raw material and the issue of 6.5 per cent withholding tax on import of raw material.

Mohammad Ibrahim of the KCCI criticised the discretionary powers of the FBR to raid and withhold records, freeze bank accounts and arrest traders without warrants and said that despite attaining excessive powers the tax collection body was still not heading in any direction.

He said that as per Pakistani records imports from China were worth $10 billion, while Chinese claimed that exports to Pakistan stood at about $14bn. “So this missing $4bn record is something to do with the FBR only,” Mr Ibrahim said.

The FPCCI proposed that there should be no duty on the export sector and on plants and machinery not manufactured in the country.

Sales tax ratio should be gradually reduced and the new industry be given tax exemption, it said.

Published in Dawn, April 20th, 2016