ISLAMABAD, Pakistan: Minister for Finance, Revenue, Statistics and Economic Affairs Muhammad Ishaq Dar on Wednesday informed the National Assembly that Pakistan would sign an agreement with Switzerland for exchange of information on tax evaded money on March 21.
“The Swiss government has offered Pakistan to sign such an agreement in the third quarter of current month that will enable us to exchange information on tax evaded money,” he informed the Lower House in a policy statement.
The minister said the process had started way back in 2013 when he had proposed to the Federal Cabinet to allow the finance ministry to enter into a new agreement with Swiss authorities by revisiting the previous treaty of 2005 about minimum exchange of information.
Ishaq Dar said initially the Swiss authorities had proposed strict conditions for such an agreement. But we continued deliberation with them that culminated in reaching an understanding for having an agreement.
Meanwhile, he added Pakistan also approached to become member of Organization for Economic Cooperation Development (OECD) and after detailed deliberations Pakistan became 104th member of this organization meant for sharing information about tax evaded money.
The finance minister said over the period many media reports had surfaced that Pakistanis had US$ 180 billion to US$ 200 billion tax evaded money in Swiss banks and this situation called for approaching the Swiss government for a treaty of information exchange.
When he said the government approached the Swiss authorities they placed before us some strict conditions like reducing tax rates, giving them MFN status, reducing students’ accounts limit to US$ 14500 from existing US$ 18000.
But he explained that Pakistan continued persuading them not to go for such conditions as fleeing with tax evaded money had become a practice by certain people in Pakistan. This process continued over previous years though Pakistan had also been trying to become part of OECD and Pakistan became member of this organization in Sept 2016.
“Therefore after understanding that now Pakistan will automatically get this information, they have also offered us a new agreement and I shall be going there to sign this agreement on March 21 this year,” he added.
Dar said meanwhile our efforts continue for membership of the OECD and numerous of their groups visited Pakistan to evaluate our system whether it was properly tuned to get the information under the OECD convention.
The minister said in July 2016 Pakistan had become a largely complying country for this convention and was offered membership that we signed on September 14, 2016.
“This instrument would be operational from next year as 90 members countries out of 104 have agreed to do so. Therefore the exchange of information process shall be starting from January 01, 2018.”
Ishaq Dar said after this agreement Pakistan would be eligible to automatically get information about tax evaded money.
The finance minister also appreciated the role of the parliament in all of this process and mentioned to passage of amendment in the money bill 2016 enabling Pakistan to become part of OECD and all other guidance and input in this regard.