FBR’s anti-benami agencies unable to catch tax evaders

A view of the Federal Board of Revenue headquarters in Islamabad.  - FBR
A view of the Federal Board of Revenue headquarters in Islamabad. – FBR
  • Commercial banks are the biggest hurdle in connecting the two databases.
  • BAA received a total of 81 references from anonymous areas.
  • An amount of Rs 13.71 billion is involved in 59 cases of benami property.

ISLAMABAD: The Anti-Benami Initiative (ABI) and the Benami Adjudication Authority (BAA) of the Federal Board of Revenue (FBR) are said to be paralyzed with no ability to catch tax evaders in the country, most of whom are at the top. Are. 1% of those who own 22% of the capital in Pakistan news informed of.

The report said on Friday that both the bodies have failed to include these individuals and companies in the tax net.

It said that people who have undisclosed assets worth billions of rupees have transferred their assets and properties in the name of others but have been successfully protected despite the implementation of the benami law in 2017 and the establishment of the Anti-Benami Initiative (ABI). . And the activation of the Anonymous Adjudicating Authority since 2019.

In some cases, the law has been used as a tool for political oppression. After its inception from July 2019 to December 2020, the Benami Adjudicating Authority performed well but later, proved unsuccessful in bringing any change.

The veracity of the abuse of anonymity can be gauged from the fact that with a Gini-coefficient of 0.3, the top 1% of the population has about 22% of the total wealth, the bottom 50% has only 4% and about 40%. The population lives below the poverty line.

There is no doubt who has the propensity to pay and who is not actually paying. Are these 1% people paying their share of personal income tax as per their income? How do they hide their transactions?

The undervaluation and parking of assets and transactions through benami accounts show a larger gap between return filers than account holders, and the volume of these transactions indicates the huge potential of the benami law. Commercial banks are the biggest hurdle in connecting the two databases.

Furthermore, benamidars are extensively used for properties, vehicles, shares and even business transactions to break the recording of the supply chain, thereby hiding the value at the originating point i.e. the manufacturer or importer and allowing the retailer to It is convenient for the seller to hide his real income and assets. and the amount of wealth and assets accumulated.

When the Benami law was passed by the Parliament, it took almost two years to make rules to implement this law. On July 1, 2019, the Benami Adjudicating Authority was established with the creation of three benches in Islamabad, Lahore and Karachi after doing the preliminary spadework for setting up any authority and approving new posts and allocating budgetary resources. However, this could not happen in the last few years, hence the post could not be materialised.

The Directorate General Anti-Benami Initiative (DG-ABI) was then launched to assist the FBR in the development and launch of an administrative and supervisory structure for the development and dissemination of maintenance and operational manuals for the three Benami Zones in Islamabad, Lahore and Karachi. Was. , To clarify various provisions of the Benami Transactions (Prohibition) Act 2017 to guide and uniformity of action in various sectors.

The Benami Adjudicating Authority received a total of 81 references from benami sectors and finalized 59 cases under Section 24 of the Benami Act 2017. Of the 59 cases, in 25 cases, benami property has been confiscated under Section 25 of the Act. These 59 cases involve acquisition costs amounting to Rs 13.71 billion. The current market value (for seizure and auction purposes) is very high. The above 81 cases include all types of benami properties such as immovable properties: plots, lands, commercial buildings, house properties etc.

Movable assets: Vehicles (including luxury vehicles). Liquid assets/cash equivalents: benami shares, bank accounts (cash in bank), benami businesses, and benami stocks (goods and commodities). 22 cases are pending out of which most of the cases are in the final stage of disposal and have been established Close liaison with NAB and State Bank of Pakistan in matters involving multi-party interest and cognizance.

This journalist sent a query to the FBR to get the version but did not receive a reply till the time of filing of this report on Friday night.

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