Money stashed by Pakistanis in Swiss banks down 34%
This is the lowest level of deposits retained by countrymen since 1996
PHOTO: REUTERS
ISLAMABAD:
Money kept by Pakistani nationals in Swiss banks fell by over 34% to the lowest level of CHF 724 million or $738 million in 2018.
Switzerland’s central bank, the Swiss National Bank, on Thursday published its annual report, “Banks in Switzerland 2018” and the corresponding data for its annual banking statistics.
The money that is directly linked to clients from Pakistan stood at CHF 724.1 million or $738 million in 2008, according to the annual report. It was down by CHF 376 million or 34% when compared with CHF 1.1 billion in 2017.
However, the money held by Pakistanis through fiduciaries or wealth managers increased by 26% to CHF 20.1 million – a net addition of only CHF 5.2 million over the preceding year.
The CHF 724 million was the lowest level of deposits retained by Pakistanis since 1996 – the year when the Swiss central bank started tracking the money by nationalities.
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Pakistanis have been constantly withdrawing their funds from the Swiss banks since 2015 when Pakistan and Switzerland finalised a revised taxation treaty. Since then, there has been a reduction of 49% or CHF 723 million in deposits held by Pakistanis, according to the annual report.
Former finance minister Ishaq Dar informed the National Assembly in 2014 that at least $200 billion of Pakistani money was stashed in Swiss banks. In a written reply, Dar had said that the government was engaging with the Swiss authorities to get to the money, hidden away by various Pakistani nationals.
In August 2014, Pakistan initialled the revised treaty with Switzerland, which would have allowed it to get information in early 2015. But in September 2014, the then federal government decided to renegotiate the treaty despite initialling the agreement.
In May 2017, the federal cabinet finally ratified the revised bilateral treaty but it did not cover old transactions.
Prime Minister Imran Khan and his cabinet ministers, particularly Communication Minister Murad Saeed, have claimed to bring back $200 billion that Pakistanis presumably stashed in Swiss bank.
There has not been any progress on this issue during the 11-month rule of the PTI government.
Minister of State for Revenue Hammad Azhar has also claimed about receiving 152,000 banks accounts details from the Organization for Economic Cooperation and Development (OECD). But Switzerland is not among the 28 nations that have shared information about the bank accounts.
Pakistan has also shared a new Memorandum of Understanding on automatic exchange of information about the bank accounts with Switzerland. So far, there is no progress.
The officials of the Federal Board of Revenue (FBR) said that Pakistani nationals still have far more than CHF 724 million deposits but these are hidden through various modes. According to them, the United Arab Emirates’ iqama is one such method. The money held by the UAE iqama holders is shown against the UAE nationality, they said.
Like its predecessor, the PTI government is also struggling to broaden the tax base. The FBR has recently claimed that it has details of 53 million Pakistanis, which it also placed on the official website.
The businessmen, corporate executives and bureaucrats, who have seen these details, told The Express Tribune that the FBR largely knows only what they have themselves disclosed in their wealth statements.
The last Pakistan Muslim League-Nawaz (PML-N) government had also given the tax amnesty scheme to allow people to whiten their offshore and domestic hidden assets. As many as 5,929 Pakistanis availed the offshore tax amnesty scheme and declared Rs1 trillion in foreign assets and paid Rs47 billion in taxes.
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An FBR official said that out of Rs1 trillion, Rs345 billion worth of assets were disclosed from the UAE destination and Rs115 billion from Switzerland. But Rs115 billion or $1 billion at that time’s exchange rate does not match with CHF 1.1 billion money held by Pakistanis in 2017.
If all the money in Switzerland had been disclosed, the net funds should have been nil in 2018 as against CHF 724 million. This shows that people have still managed to hidden their money abroad.
In total, nearly 83,000 Pakistanis availed the PML-N’s tax amnesty and declared Rs2.5 trillion assets and paid Rs124 billion taxes.
Prime Minister Imran has also offered an assets whitening scheme that is going to end on Sunday. During the first month, people gave a cold response and only 250 persons availed the scheme. But a senior FBR official said on Thursday that the response was very encouraging during this week. He hoped that the government may fetch more than Rs30 billion in revenues, if the trend continued during the remaining three days.
Money kept by Pakistani nationals in Swiss banks fell by over 34% to the lowest level of CHF 724 million or $738 million in 2018.
Switzerland’s central bank, the Swiss National Bank, on Thursday published its annual report, “Banks in Switzerland 2018” and the corresponding data for its annual banking statistics.
The money that is directly linked to clients from Pakistan stood at CHF 724.1 million or $738 million in 2008, according to the annual report. It was down by CHF 376 million or 34% when compared with CHF 1.1 billion in 2017.
However, the money held by Pakistanis through fiduciaries or wealth managers increased by 26% to CHF 20.1 million – a net addition of only CHF 5.2 million over the preceding year.
The CHF 724 million was the lowest level of deposits retained by Pakistanis since 1996 – the year when the Swiss central bank started tracking the money by nationalities.
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Pakistanis have been constantly withdrawing their funds from the Swiss banks since 2015 when Pakistan and Switzerland finalised a revised taxation treaty. Since then, there has been a reduction of 49% or CHF 723 million in deposits held by Pakistanis, according to the annual report.
Former finance minister Ishaq Dar informed the National Assembly in 2014 that at least $200 billion of Pakistani money was stashed in Swiss banks. In a written reply, Dar had said that the government was engaging with the Swiss authorities to get to the money, hidden away by various Pakistani nationals.
In August 2014, Pakistan initialled the revised treaty with Switzerland, which would have allowed it to get information in early 2015. But in September 2014, the then federal government decided to renegotiate the treaty despite initialling the agreement.
In May 2017, the federal cabinet finally ratified the revised bilateral treaty but it did not cover old transactions.
Prime Minister Imran Khan and his cabinet ministers, particularly Communication Minister Murad Saeed, have claimed to bring back $200 billion that Pakistanis presumably stashed in Swiss bank.
There has not been any progress on this issue during the 11-month rule of the PTI government.
Minister of State for Revenue Hammad Azhar has also claimed about receiving 152,000 banks accounts details from the Organization for Economic Cooperation and Development (OECD). But Switzerland is not among the 28 nations that have shared information about the bank accounts.
Pakistan has also shared a new Memorandum of Understanding on automatic exchange of information about the bank accounts with Switzerland. So far, there is no progress.
The officials of the Federal Board of Revenue (FBR) said that Pakistani nationals still have far more than CHF 724 million deposits but these are hidden through various modes. According to them, the United Arab Emirates’ iqama is one such method. The money held by the UAE iqama holders is shown against the UAE nationality, they said.
Like its predecessor, the PTI government is also struggling to broaden the tax base. The FBR has recently claimed that it has details of 53 million Pakistanis, which it also placed on the official website.
The businessmen, corporate executives and bureaucrats, who have seen these details, told The Express Tribune that the FBR largely knows only what they have themselves disclosed in their wealth statements.
The last Pakistan Muslim League-Nawaz (PML-N) government had also given the tax amnesty scheme to allow people to whiten their offshore and domestic hidden assets. As many as 5,929 Pakistanis availed the offshore tax amnesty scheme and declared Rs1 trillion in foreign assets and paid Rs47 billion in taxes.
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An FBR official said that out of Rs1 trillion, Rs345 billion worth of assets were disclosed from the UAE destination and Rs115 billion from Switzerland. But Rs115 billion or $1 billion at that time’s exchange rate does not match with CHF 1.1 billion money held by Pakistanis in 2017.
If all the money in Switzerland had been disclosed, the net funds should have been nil in 2018 as against CHF 724 million. This shows that people have still managed to hidden their money abroad.
In total, nearly 83,000 Pakistanis availed the PML-N’s tax amnesty and declared Rs2.5 trillion assets and paid Rs124 billion taxes.
Prime Minister Imran has also offered an assets whitening scheme that is going to end on Sunday. During the first month, people gave a cold response and only 250 persons availed the scheme. But a senior FBR official said on Thursday that the response was very encouraging during this week. He hoped that the government may fetch more than Rs30 billion in revenues, if the trend continued during the remaining three days.