Banks in Pakistan have coincided to share the details of their account holder with the tax authorities in a deal inked this week to check suspected undocumented money in the banking channels.
An agreement was reached at meeting between Syed Shabbar Zaidi, chairman Federal Board of Revenue (FBR) and chief executives of commercial banks on November 27, 2019 at the Large Taxpayers Unit (LTU) Karachi
“The PBA (Pakistan Banks Association) has agreed to withdraw its petitions from the High Courts and also agreed to provide account holders information under section 165A (of the Income Tax Ordinance, 2001),” a source quoted in the report said. “It would enable the tax department to access real-time information of transactions made through the banking system.”
The FBR chairman, at the meeting, said section 165A was amended in 2014, 2018 and recently through Supplementary Finance Amendment Act, 2019 on PBA’s recommendations.
As per law, the banks were bound to provide details of account holders. Those details included a list of persons making cash withdrawal of Rs50,000/day or over Rs1 million/month; deposits of Rs10 million/month; credit card payment of Rs250,000/month; and details of persons receiving profit on debt above Rs500,000/year.
The laws in Income Tax Ordinance, 2001 have superseded other laws, including Banking Companies Ordinance, 1962; the Protection of Economic Reforms Act, 1992; and Foreign Exchange Regulation Act, 1947, yet the banks were not providing the details on one pretext or the other.
