ISLAMABAD: The National Assembly Standing Committee on Finance on Tuesday approved the draft ‘Benami Transactions (Prohibition) Act 2016’ which aims at punishing people holding ‘benami’ properties and curb the practice.

The committee meeting, held at the Parliament House and chaired by Qaiser Ahmad Sheikh, approved the draft bill with observations from Pakistan People’s Party’s Syed Naveed Qamar and Pakistan Tehreek-i-Insaf’s Asad Umar.

The draft law, which will also apply to global assets of Pakistanis, proposes up to seven years rigorous imprisonment and fine for people with benami properties.

The term ‘benami properties’ refers to any property and assets which have been purchased in the name of a person other than the one financing it – a move which allows parking of undeclared money in the real estate sector.

In Pakistan, it is not unusual for politicians, businessmen and government officers to purchase properties in the name of their relatives, spouses or servants to hide their assets.

As per the draft law, a person, who is required to furnish information under this Act, knowingly gives false information to any authority or furnishes any false document shall be punishable with rigorous imprisonment for a term which shall not be less than six months but which may extend to five years and shall also be liable to fine which may extend to 10 per cent of the fair market value of the property.

The draft bill exempted religious institutions and religious trusts from its domain but after objections by members belonging to all parties, the exemption has been omitted.

Existing properties covered

During the meeting, PTI’s Asad Umar vehemently explained to the bureaucracy and treasury members that the draft law should also cover existing benami properties.

“What we are talking about are new benami transactions which will be illegal after the law is approved but what about those who already have benami properties?” Mr Umar questioned.

“People have huge houses in the name of their cooks and they can enjoy that status as the law is effective on new benami transactions,” he added.

It was agreed to amend the wording and include that holding such properties too would be a crime. The new description is – ‘No person shall enter into Benami Transaction and hold Benami Assets.’

Even the fire band opponent of PTI – PML-N’s Mian Abdul Manan agreed to the point raised by Mr Umar.

“Those who have such properties should get it in their name and then gift it to their servants. At least then it will be clear in the documents as how a servant or a minor could own huge properties,” Mr Manan remarked.

PPP’s Naveed Qamar questioned if the law should be implemented with immediate effect. However, it was decided that implementation of the law would be notified by the federal government.

Meanwhile, MQM’s Abdul Rashid Godil questioned if the Federal Board of Revenue has the capacity and will to get hold of benami transactions and catch the influential inclu­ding FBR’s senior officers.

The draft benami prohibition bill had been pending in the Committee for almost four months. After the standing committee’s approval, it will be forwarded to the National Assembly and if approved it will be sent to the Senate.

Published in Dawn, August 17th, 2016