Finance Minister Ishaq Dar on Wednesday told the National Assembly that Pakistan will sign an agreement with Switzerland on exchange of information regarding bank accounts on March 21.

"The Swiss government offered to sign such an agreement with Pakistan in the third quarter of the current month that will enable us to exchange information on tax-evaded money," Dar said in a policy statement.

The finance minister said that several media reports have surfaced over the years alleging that Pakistanis have evaded taxes ─ a hefty amount of over $180-200 billion ─ and stored the money in Swiss banks.

The situation demanded that Pakistan approach the Swiss government for a treaty surrounding the exchange of information, Dar added.

The minister said that the process to draft the agreement began in 2013 when he suggested the Finance Ministry revisit the 2005 treaty on avoidance of double taxation, particularly the clause regarding minimum exchange of information with respect to income tax.

Dar said he had proposed that the federal cabinet allow the Finance Ministry to enter into a new agreement with Swiss authorities.

The finance minister said that the Swiss government had initially proposed "strict conditions" to be included in the agreement, such as reducing tax rates, granting it most-favoured nation (MFN) status, and reducing students' bank account limit to $14,500 from the existing $18,000.

However, Dar said, Pakistan continued to discuss the matter with Swiss authorities and advised them to alter their conditions, as fleeing with money laundered via tax evasion had become a common practice by certain people.

"Therefore after an understanding that now Pakistan will automatically get this information, they have also offered us a new agreement and I shall be going there to sign this agreement on March 21 this year," he said.

In September 2016, Pakistan became the 104th member of Organisation of Economic Cooperation and Development (OECD), a global forum on an exchange of tax information of offshore accounts and investments.

Signing the OECD Convention on Mutual Administrative Assistance in Tax Matters paved the way for Pakistan to enter into exchange of information regarding offshore accounts. The need for signing the law was felt in the wake of Panama Papers case.

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

By-election trends
Updated 23 Apr, 2024

By-election trends

Unless the culture of violence and rigging is rooted out, the credibility of the electoral process in Pakistan will continue to remain under a cloud.
Privatising PIA
23 Apr, 2024

Privatising PIA

FINANCE Minister Muhammad Aurangzeb’s reaffirmation that the process of disinvestment of the loss-making national...
Suffering in captivity
23 Apr, 2024

Suffering in captivity

YET another animal — a lioness — is critically ill at the Karachi Zoo. The feline, emaciated and barely able to...
Not without reform
Updated 22 Apr, 2024

Not without reform

The problem with us is that our ruling elite is still trying to find a way around the tough reforms that will hit their privileges.
Raisi’s visit
22 Apr, 2024

Raisi’s visit

IRANIAN President Ebrahim Raisi, who begins his three-day trip to Pakistan today, will be visiting the country ...
Janus-faced
22 Apr, 2024

Janus-faced

THE US has done it again. While officially insisting it is committed to a peaceful resolution to the...