Paradise Papers: FBR asks SBP to gather financial data of 30 Pakistanis

Under current laws, FBR cannot go beyond the tax year of 2012

ISLAMABAD: Despite debateable legality of its action, the Federal Board of Revenue (FBR) on Monday sought information about domestic and overseas bank accounts of former prime minister Shaukat Aziz and at least 29 other Pakistanis named in the Paradise Papers.

The FBR asked the State Bank of Pakistan (SBP) to gather information from the banks concerned about 30 individuals, including owners of commercial banks and major conglomerates, correspondence between the FBR and the SBP shows.

The FBR tasked the central bank with securing information with effect from July 2006, which itself is questionable.



Under the Income Tax Ordinance of 2001, the tax administration cannot open more than five-year-old tax cases, leaving a big question mark over the entire process.

Under current laws, the FBR cannot go beyond the tax year of 2012.

Despite repeated attempts, FBR spokesperson Dr Mohammad Iqbal was unavailable for comments. He was requested to justify the need for securing information dating back from July 2006 and why a letter in this regard was sent by a junior officer.

A grade 18 officer of the FBR sent a letter to Governor SBP Tariq Bajwa, asking him to provide this information, breaking protocols and demonstrating the tax officials’ level of arrogance.

“FBR is conducting investigation in the cases of individuals having offshore entities and assets, in the light of information disclosed by Paradise [Papers] leaks,” the FBR’s letter stated. Because of the limited scope of the leaked information and to move forward with the investigation, “FBR requires assistance of SBP for provision of further information”.

The International Consortium of Investigative Journalists (ICIJ) released nearly 13.4 million documents on how the rich evaded taxes by manoeuvring offshore financial products. The records of Pakistanis were mostly found in Bermuda, British Virgin Islands, Cayman Islands, Malta and other jurisdictions with whom Pakistani authorities have no treaties on exchange of information. 

Nature of information

The FBR sought details of all bank accounts of these individuals in Pakistan and overseas branches of Pakistani banks, besides asking the central bank to furnish information about fixed deposits and special term deposits and bank lockers maintained by these individuals in Pakistan, loans provided by financial institutions to these individuals and written off and defaulted loans, if any.

Notable among those mentioned in Paradise Papers are: Former prime minister Shaukat Aziz, Mian Mansha, Hussain Dawood and his family members, Ayaz Khan Niazi, Alauddin J Feerasta and family members, Fauzia Razza, Shehryar Taseer, Saad Saeed Faruqui and Zahida Habib.

Owning an offshore asset is legal as long as it is obtained through known sources of income and all due taxes are paid on the amount generated in Pakistan and transferred abroad.

The central bank forwarded FBR’s request to presidents and CEOs of all banks concerned, directing them to “provide the required information directly to the FBR in accordance with relevant provisions of law”.

SBP’s chief spokesperson Abid Qamar also could not be contacted for comments till the filing of this report.



“The FBR has dumped all responsibility on the central bank’s shoulders, which is inappropriate,” said Shabbar Zaidi, a senior partner at AF Ferguson – the top chartered accountancy firm. He said that instead of sending the request for information under the Income Tax Ordinance, 2001, the FBR’s letter did not mention any law.

The FBR can seek information under sections 176 and 177 of the Income Tax Ordinance of 2001 and seeking income tax-related information under any other law would be deemed illegal, said Zaidi.

In case of the Panama Papers too, the FBR adopted an inappropriate legal course of action, because of which no breakthrough occurred even after nearly 20 months. It is feared that the FBR may again spoil the entire case by mishandling this matter, independent legal experts agreed.

A three-member bench of the Supreme Court is also hearing a petition filed by the Jamaat-e-Islami (JI) that sought action against all individuals named in the Panama Papers. The judicial proceedings are so far confined to members of the former ruling family.

A cursory look at the Paradise Papers suggested that almost all cases were older than five years and some may relate to commissions earned from arms deals and deposited in Swiss banks, according to Dr Ikramul Haq, an advocate of the SC.