ISLAMABAD: Pakistan’s top tax team has decided to establish dedicated anti-money laundering (AML) units to investigate and prosecute growing offences of tax evasion and fraud.
The announcement came after a meeting headed by Federal Board of Revenue (FBR) Chairman Dr Muhammad Irshad on Monday. The units will fall under the administrative purview of the Intelligence and Investigation (I&I) department of Inland Revenue (IR).
The AML units were given a target of recovering around Rs8-10 billion in May and June. The units will be functional by the end of April.
I&I Director General Khawaja Tanveer Ahmed told meeting participants that the units will initially be established in seven regional directorates.
Dr Irshad ordered that the units be made operational at the directorates of I&I in Karachi, Lahore, Peshawar, Islamabad, Multan, Faisalabad, Hyderabad and Quetta before the end of the month.
The FBR has sought input from field formations on the proposed units within three days.
The meeting proposed the establishment of dedicated police stations at all regional directorates of I&I. Currently, the Directorate General has to seek assistance from local police stations to keep the accused in custody on remand.
It was also decided that the dedicated AML units will be given powers under Benami Transactions (Prohibition) Act 2016.
Money laundering can be defined as the process of disguising the proceeds of crime and moving value through trade or investment in real estate in an attempt to legitimise their illegal origins. Keeping benami assets for the purpose of concealment from tax authorities is also a form of money laundering.
I&I has received 168 suspicious transactions reports (STRs) from the Financial Monitoring Unit of the State Bank of Pakistan (SBP) since June 9, 2016.
The break-up shows the highest number of STRs (49) pertains to the Karachi Directorate, followed by Lahore (39), Peshawar (38), Islamabad (27), Multan (9), Faisalabad (4), Hyderabad (2) and Quetta (2).
As per the concept paper, the dedicated unit will be headed by an AML director who will report to the I&I-IR director general. The director will be assisted by an additional director (headquarters) and three other additional directors in Karachi, Lahore and Peshawar. Moreover, a number of deputy directors will be appointed as investigating officers in different directorates.
The I&I-IR Directorate General in Islamabad was notified by the government as investigating and prosecuting agency within the meaning of Section 2 (i) of Anti-Money Laundering Act 2010 for more effective and efficient handling of cases of money laundering.
There are four predicate offences, which were added to Anti-Money Laundering Act 2010 in 2016, regarding income tax evasion: prosecution for false statement in verification where the tax sought to be evaded is Rs10 million or more, prosecution for the concealment of income where the tax sought to be evaded is Rs10m or more, prosecution for the improper use of National Tax Number where the tax sought to be evaded is Rs10m or more, and prosecution for abetment where the tax sought to be evaded is Rs10m or more.
Published in Dawn, April 25th, 2017
