The Federal Board of Revenue (FBR) has decided to approach the law division for interpretation of laws in order to resolve a longstanding dispute with banks over extracting information about account holders.
A senior official of FBR told The Express Tribune that under the Income Tax Ordinance tax officials could obtain information and account details of bank depositors. However, bank officials argue that under the Banking Companies Ordinance they cannot give any information about their account holders to the taxmen.
He said banks also took support of the Protection of Economic Reforms Act 1992 to restrict information about account holders.
FBR wants account details of depositors of banks in an attempt to bring more people under the tax net to increase the tax-to-gross domestic product ratio, meet the annual revenue collection target of Rs1,952 billion and widen documentation of economy.
In the previous fiscal year ended June 2011, FBR had identified 700,000 rich people, who own luxurious houses and frequently travel abroad, but do not pay any tax.
The official said FBR was of the view that the Income Tax Ordinance was above the Banking Companies Ordinance, Protection of Economic Reforms Act and other such laws and it could seek details of bank account holders.
He said FBR, on the advice of consultants, sought the law division’s assistance, asking it to interpret all these laws and give a ruling to clarify whether the tax officials could seek information about bank depositors.
Published in The Express Tribune, August 4th, 2011.