ISLAMABAD, Feb 15: Pakistan on Wednesday ratified the Saarc Limited Multilateral Agreement on avoidance of double taxation and mutual administrative assistance in tax matters. An official in the Central Board of Revenue (CBR) told Dawn that following the ratification of the agreement by all the seven member countries, it would come into effect.

This would be the first-ever multilateral taxation treaty of Pakistan with any regional trade bloc. The foreign ministers of the Saarc member countries signed the agreement during the last summit held in Dhaka on November 13, 2005, which was awaiting the ratification of the respective governments.

The agreement was finalized in the meetings of the inter-governmental experts group (IGEG) of the member countries. India, had, however, proposed a broad-based multilateral tax treaty for avoidance of double taxation, which was opposed by other member countries.

According to the official, the agreement would allow exchange of information, assistance in tax collection, assistance in service of documents, sharing of tax policy, extension of training facilities, exemptions to teachers, researchers and students and finally developing a mechanism for sharing policy initiatives among the Saarc countries.

Pakistan has so far, signed comprehensive agreements for the avoidance of double taxation and prevention of fiscal evasion with respect to taxes with Bangladesh on January 1, 1980; Nepal on January 25, 2001 and Sri Lanka in January 1983.

Pakistan and India have a limited purpose agreement for the avoidance of double taxation regarding international air transport, which was effective from March 1, 1989.

Pakistan did not have any limited purpose or a comprehensive agreement for the avoidance of double taxation with Maldives and Bhutan.

An agreement between Pakistan and Brunei for avoidance of double taxation and prevention of financial evasion with respect to tax on income was also approved by the cabinet.