Federal Board of Revenue: Panama cases older than 5 years not to be opened

PM’s assistant cites limitations imposed by the law as reason

ISLAMABAD: The tax authorities will not open those Panama cases in which transactions have taken place more than five years ago due to limitations imposed under the law, said Special Assistant to Prime Minister on Revenue Haroon Akhtar Khan on Friday.

The special assistant said the apex court’s decision not to include the Federal Board of Revenue (FBR) in the Joint Investigation Team (JIT) was a good sign as it showed the board has already completed its work. He insisted that the FBR exclusion from the JIT “was not the mistrust” on the board.

Khan gave the statement a day after the Supreme Court (SC) questioned the efficiency of FBR in pursuing people who had been named in the Panama leaks in April last year.

In its Panamagate verdict, the SC said the FBR halfheartedly issued some notices six months after the information came into public domain, which speaks volumes about the lethargy, carelessness and inefficiency displayed by the premium tax and financial watchdog of the country.



The names of about 400 Pakistanis had surfaced in Panama and Bahama leaks who owned offshore companies in infamous tax heavens. No meaningful action could be taken against these people, except serving them initial tax notices. Owning an offshore company is legal but it is presumed that most of those people setup offshore companies to make assets by evading taxes and hiding their real incomes.

The Income Tax Ordinance 2001 bars the FBR to open tax cases, which are more than five-year-old, said Khan while speaking to media before the oath-taking ceremony of the chief executive officer (CEO) of the FBR Foundation. The FBR Foundation has been setup on the model of Fauji Foundation in an effort to provide homes and free health and education services to the FBR employees, said FBR, Chairman, Dr Mohammad Irshad.

However, when Khan’s attention was drawn towards a section of Income Tax Ordinance that condones time limits, Khan said even the relevant section does not provide “clear authority to open cases, which are more than five years old”.

“If the FBR starts opening 50-year-old cases then no one would be safe in Pakistan,” said the revenue advisor while defending his decision not to go back more than five years. The FBR does not want to set a precedent that can be misused in the future, he added.



In 2009, the parliament had amended the Income Tax Ordinance 2001 to allow the FBR to condone time limits where it deemed fit. The section 214 A states, “Where any time or period has been specified under any of the provisions of the ordinance or rules made there-under within or any act or thing is to be done, the board may, in any case or class of cases, permit such application to be made or such act or thing to be done within such time or period as it may consider appropriate”.

But he claimed that the probe in the Panama leaks would continue and the FBR would not stop its work in cases that are not time barred.

While responding to SC’s adverse comments about the FBR, Khan said the court’s observations could have been the result of the limitations that the FBR was facing due to absence of bilateral exchange of information treaties with those tax heavens. “The SC has not passed a stricture against the FBR,” he added. 

FBR Foundation

Irshad administered oath to newly-elected CEO of FBR Foundation Saleem Ranjha –an officer of the Customs Service and pioneer member of the country’s largest microfinance institute Akhuwat. Officially, it was the last day of Irshad as FBR chairman before he attains the age of superannuation.



However, Finance and Revenue Minister Ishaq Dar has sent a summary to the prime minister for giving Irshad extension till June this year to facilitate the budget-making process.

Irshad regretted that despite having a strong workforce of over 16,000 employees there was no welfare organisation working for them. The FBR has decided to allocate land to its foundation for building houses, hospitals and education institutions, Irshad added.

Published in The Express Tribune, April 22^nd, 2017.