KARACHI: Federal Board of Revenue (FBR) member policy Dr Mohammad Iqbal on Wednesday assured tax consultants that all lacunas and deficiencies from the Anti-Money Laundering (AML) Law will be removed.

Speaking at a seminar organised by the Karachi Tax Bar Association (KTBA), Dr Iqbal agreed with the issues and complaints raised by tax consultants over the unbridled use of AML Law by field officers of Regional Tax Officers (RTOs) and Large Taxpayers Units (LTUs).

However, he said since the law is at its nascent stage, tax consultants and tax collectors will have to learn a lot before it becomes fully operative and pragmatic.

He agreed that young officers of RTOs and LTUs wanted to exert pressure on taxpayers and seemed to be in a hurry in taking punitive measures by conducting raids and filing FIRs.

However, he feared that this will damage business and industry which in any case is not the objective of the law.

Referring to a point raised by Mr Abid H Shaban, FBR member policy said that tax evasion is not money laundering. “High tax rate has been one of the biggest reasons for concealment and tax evasion,” he added.

Dr Iqbal said till such time lacunas and anomalies are not removed from the anti-money laundering law, standing operating procedures (SOPs) will be framed in order to restrain field officers of FBR from going for aggressive tactics.

He also agreed that there were deficiencies in the working of FBR field officers. He narrated an incident wherein during his visit to RTOs and on checking some files it was found that many notices issued to taxpayers were on the basis of previous laws which did not exist.

Mr Shaban put some startling facts before the audience with regards to the fabulous growth of prize bonds.

He said that prize bonds stock has almost doubled to Rs681 billion in the past three years. Significant share of increase has been amongst big ticket bonds of Rs25,000 denomination, which increased from Rs40bn to Rs102bn, and of Rs40,000 prize bonds which jumped from Rs118bn to Rs194bn. However, they are still in short supply in the market, he added.

On the occasion, Syed Shabbar Zaidi discussed ‘Benami Transaction and Properties’ in detail.

“A benami transaction is not illegal because transfer of property does not itself by its definition require that the transfer in favour of one person be in the name of another person. This right of transfer cannot be altered by the benami law,” he added.

Published in Dawn, October 12th, 2017