Before becoming the president of the United States of America, Donald Trump was a celebrity, real estate tycoon and an established businessman.
During his years in presidency, the opposition left no stone unturned to push him to share his tax details but the man in the White House refused to voluntarily share his income tax returns citing secrecy clause, which he still enjoys. That, however, happened in the US. Contrary to the protection granted under the confidentiality clause.
Meanwhile, the tax authorities in Pakistan breached the taxpayers’ trust when they secretly shared the record of three million income tax return filers with the National Database and Registration Authority (Nadra).
“Even the US Supreme Court upheld the right of President Trump to have confidentiality regarding his tax returns,” legal expert, Mansoor Hassan Khan, said in the Express News’ talk show, The Review, on Saturday.
Hosts, Shehbaz Rana and Kamran Yousaf, along with the guest discussed violation of secrecy clause, government’s move to introduce an ordinance giving legal cover to share the Federal Board of Revenue (FBR)’s data with other entity and what options the taxpayers had once such initiatives were taken without going to parliament.
The law assures confidentiality to the taxpayer, Khan said, adding that imposing something through an ordinance undermines the whole parliamentary process.
Being a corporate lawyer, he said, such adventures negatively impact the confidence of the taxpayer and shake the trust between the state and the individual or the company. The courts can strike down any ordinance which goes against the fundamental rights such as privacy right.
Apparently, he said, the confidentiality clause exists in almost every country’s tax laws, adding that secrecy was crucial because availability of such details can put individual’s security at risk.
Companies too do not want to see their business secrets in public domain, he added, saying that is why there is prohibition on sharing such details.
Shocking as it may seem, sources in Nadra recently revealed that FBR had discreetly handed over the tax record of income tax return filers for the period between 2014 and 2018 to Nadra in 2019.
Sources added that the FBR had also handed over withholding tax statements of unregistered persons to Nadra – all on the pretext of increasing tax collection. Yet, the FBR missed the tax targets in the last three years.
Now, reportedly, the federal government is planning to promulgate a presidential ordinance to hand over record of existing three million taxpayers to Nadra in a bid to increase tax collection, which may severely compromise privacy of the people.
Sources said that the FBR and Nadra were collaborating to make a legal amendment to the Income Tax Ordinance to relax a clause that barred the FBR from sharing information of income tax return filers with a third party.
They added a new amendment had been drafted to change the existing Section 216(3) to make room for sharing the income tax statement and wealth statement of taxpayers with Nadra. It is the second attempt that the government is going to make in less than a month to share taxpayers’ record with a third party.
Earlier, days before the approval of FY’22 budget, the National Accountability Bureau (NAB) had asked the government to give it access to local and offshore tax records of all politically exposed persons, bureaucrats and their families by introducing new legal amendments.
NAB had also sought to relax Section 216 of the Income Tax Ordinance, which ensured confidentiality of taxpayers’ data. Section 216 bars the FBR from the disclosure of information by a public servant but its sub-section 3 provides certain exemptions.
The government now wants to amend sub-section 3 to allow Nadra to get access to the taxpayers’ record.
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