NA panel approves bill prohibiting people from keeping assets in others' names
Withdraws proposed exemption for charitable and religious trusts
Withdraws proposed exemption for charitable and religious trusts. PHOTO: ICIJ
ISLAMABAD:
A National Assembly panel on Tuesday unanimously approved an amended version of a bill that prohibits people from keeping assets in the name of others to avoid taxes and hide ill-gotten money, bringing Benami (unnamed) transactions of the past within the ambit of the proposed law.
The National Assembly Standing Committee on Finance gave the go-ahead to the Benami Transactions Prohibition Bill 2016, which after its approval from parliament would look to put an end to the practice of keeping assets in the name of others.
FBR moves to seek info on 200 Pakistanis' assets
Member National Assembly (MNA) of Pakistan Peoples Party (PPP) Syed Naveed Qamar and Pakistan Tehreek-e-Insaf’s Asad Umar helped plug the lacunas in the bill, notably the exclusion of past Benami transactions.
Umar highlighted the gap so the government agreed to cover all Benami transactions of the past as well under the proposed law. The original version of the bill pertained to only future Benami transactions.
The government also withdrew the proposal of allowing charitable and religious trusts to keep holding Benami assets. It also took back a proposal that called for proceeding against legal heirs of an accused person in case the accused died during trial.
Benami assets are those that are not in the owner’s name and are aimed at concealing the real ownership. Benami transactions are one of the sources of circulation and investment of black money.
Legal cover
However, so far, under different Pakistani laws, Benami transactions have been protected, fully supported and recognised, according to findings of the government-constituted Tax Reforms Commission.
Its report says Section 82 of the Trust Act 1882, Section 66 of the Court of Civil Procedures and Section 41 of the Transfer of Property Act 1882 protect the Benami transactions.
Imran admits owning offshore company to 'avoid UK taxes'
The government had presented the Benami bill in parliament as part of a commitment to the International Monetary Fund in order to curb this practice. Tax authorities were also perturbed as experience suggested that such transactions were often used for dodging taxes.
The legal definition of Benami transaction says that it is an arrangement where a person on behalf of another person, who has paid for it, holds a property. It also includes transactions under fictitious names. The bill prohibits all people from entering into Benami transactions.
Powers
Once enacted, the law will give the government powers to confiscate Benami properties and the violators could face imprisonment of up to seven years. Any person who enters into a Benami transaction will be liable to be taxed at the rate of 25% of fair market value of the property.
The Initiating Officer or the Adjudicating Authority will have the authority to seize or retain any books of accounts that are required for investigation for a certain period.
The Adjudicating Officer, after conducting a hearing, may make an order for confiscation of the Benami property.
The administrator will have powers to receive and manage the property, which has been confiscated. The administrator will issue a notice for the surrender or forcible takeover of possession of the Benami property.
Any person aggrieved by an order of the Adjudicating Officer will appeal to the Appellate Tribunal and any person aggrieved by the Appellate Tribunal may appeal to the high court.
Ishaq Dar's sons own two towers in UAE acquired through illegal means: Imran Khan
PPP’s Naveed Qamar objected to the government’s decision to appoint officers of the Federal Board of Revenue as administrators of the confiscated properties. “This may open an avenue for corruption,” he said.
MQM’s Rashid Godil questioned whether the FBR had the administrative capacity to catch the influential people holding Benami assets.
In case of a company, its directors, managers and other office-holders concerned will be considered guilty of keeping the Benami properties.
Published in The Express Tribune, August 17th, 2016.
A National Assembly panel on Tuesday unanimously approved an amended version of a bill that prohibits people from keeping assets in the name of others to avoid taxes and hide ill-gotten money, bringing Benami (unnamed) transactions of the past within the ambit of the proposed law.
The National Assembly Standing Committee on Finance gave the go-ahead to the Benami Transactions Prohibition Bill 2016, which after its approval from parliament would look to put an end to the practice of keeping assets in the name of others.
FBR moves to seek info on 200 Pakistanis' assets
Member National Assembly (MNA) of Pakistan Peoples Party (PPP) Syed Naveed Qamar and Pakistan Tehreek-e-Insaf’s Asad Umar helped plug the lacunas in the bill, notably the exclusion of past Benami transactions.
Umar highlighted the gap so the government agreed to cover all Benami transactions of the past as well under the proposed law. The original version of the bill pertained to only future Benami transactions.
The government also withdrew the proposal of allowing charitable and religious trusts to keep holding Benami assets. It also took back a proposal that called for proceeding against legal heirs of an accused person in case the accused died during trial.
Benami assets are those that are not in the owner’s name and are aimed at concealing the real ownership. Benami transactions are one of the sources of circulation and investment of black money.
Legal cover
However, so far, under different Pakistani laws, Benami transactions have been protected, fully supported and recognised, according to findings of the government-constituted Tax Reforms Commission.
Its report says Section 82 of the Trust Act 1882, Section 66 of the Court of Civil Procedures and Section 41 of the Transfer of Property Act 1882 protect the Benami transactions.
Imran admits owning offshore company to 'avoid UK taxes'
The government had presented the Benami bill in parliament as part of a commitment to the International Monetary Fund in order to curb this practice. Tax authorities were also perturbed as experience suggested that such transactions were often used for dodging taxes.
The legal definition of Benami transaction says that it is an arrangement where a person on behalf of another person, who has paid for it, holds a property. It also includes transactions under fictitious names. The bill prohibits all people from entering into Benami transactions.
Powers
Once enacted, the law will give the government powers to confiscate Benami properties and the violators could face imprisonment of up to seven years. Any person who enters into a Benami transaction will be liable to be taxed at the rate of 25% of fair market value of the property.
The Initiating Officer or the Adjudicating Authority will have the authority to seize or retain any books of accounts that are required for investigation for a certain period.
The Adjudicating Officer, after conducting a hearing, may make an order for confiscation of the Benami property.
The administrator will have powers to receive and manage the property, which has been confiscated. The administrator will issue a notice for the surrender or forcible takeover of possession of the Benami property.
Any person aggrieved by an order of the Adjudicating Officer will appeal to the Appellate Tribunal and any person aggrieved by the Appellate Tribunal may appeal to the high court.
Ishaq Dar's sons own two towers in UAE acquired through illegal means: Imran Khan
PPP’s Naveed Qamar objected to the government’s decision to appoint officers of the Federal Board of Revenue as administrators of the confiscated properties. “This may open an avenue for corruption,” he said.
MQM’s Rashid Godil questioned whether the FBR had the administrative capacity to catch the influential people holding Benami assets.
In case of a company, its directors, managers and other office-holders concerned will be considered guilty of keeping the Benami properties.
Published in The Express Tribune, August 17th, 2016.