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Moneychangers misusing Income Tax ordinance to evade taxes - Naveed Yaseen - 05-13-2009 07:33 AM
MUHAMMAD ALI
KARACHI (May 13 2009): Moneychangers involved in illegal business are misusing the provision of the income tax ordinance, 2001 pertaining to non-resident Pakistani (NRP) to conceal unexplained income or assets to evade taxes of billions of rupees.
Sources told Business Recorder on Tuesday that sub section (4) of section 111 of the Income Tax Ordinance, 2001 has allowed NRP not to declare unexplained income or assets aimed at enhancing foreign remittances. "NRP does not have to offer explanation about the nature and source of any amount of foreign exchange remitted from outside Pakistan through normal banking channels," they said.
They said that the above-mentioned sub-section was aimed at promoting inflow of foreign exchange remittances towards the country, besides facilitating NRP at maximum. To a question, they said the persons involved in foreign exchange business are largely enjoying the relaxation given by the provision, which was only subjected to NRP.
They said that billions of rupees have been transferred without mentioning the nature and source of the foreign exchange, providing huge losses to national exchequer.
Moreover, they said the provision, which allows NRPs not to reveal source of income, is refraining moneychangers and others related businessmen from being enrolled in the tax net.
They, therefore, urged the Federal Board of Revenue (FBR) to abolish or amend the subsection (4) of section 111 of the Income Tax Ordinance, 2001 on foreign remittance, saying that NRPs would also be restricted to explain their undeclared income or assets and hoped that it would help eliminate all illegal practices being done by the moneychangers and other associates.
They said that the strict monitoring of the transactions of moneychangers has now become imperative after surfacing the scam of Khanani & Kalia Pvt LTD, a company accused to transferring some $500 million in a short span of ten months. "If the government wanted to deal money launders with iron hand, the concerned authority should take remedial measures to make the provision beneficial for the country," they maintained.
http://www.brecorder.com/index.php?id=37558