FBR chief says UAE agrees to share tax information of Pakistani investors 

Update FBR chief says UAE agrees to share tax information of Pakistani investors 
A policeman walks past the Federal Board of Revenue (FBR) office building in Islamabad, August 29, 2018. (REUTERS/File)
Updated 14 October 2019
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FBR chief says UAE agrees to share tax information of Pakistani investors 

FBR chief says UAE agrees to share tax information of Pakistani investors 
  • FBR chairman says tax collection body received information about Pakistanis investing in the UAE in a bid to conceal illegal wealth
  • Experts say the move could act as a deterrent against tax-evasion and movement of illegal assets

ISLAMABAD: Pakistan and the United Arab Emirates have agreed to develop better mechanisms to share tax information about Pakistanis investing in the UAE, the chairman of the Federal Board of Revenue (FBR) Shabbar Zaidi said on Saturday, confirming that the tax collecting body had received information about Pakistani citizens who have invested in properties in the Emirates in a bid to conceal illegal wealth.
Under the common reporting system (CRS), which allows for the automatic exchange of banking information between the tax authorities of countries, Pakistan received the data from the Dubai Land Department (DLD) after a three-day meeting between the UAE finance ministry and FBR representatives in Dubai that concluded on October 10.
Zaidi said that the UAE authorities had agreed to cooperate in the sharing of information about Pakistani-owned properties, adding that the two countries would work to revise a 1993 UAE-Pakistan double tax treaty aimed at eliminating fiscal evasion as well as double taxation and additional and indirect taxes.
“The main purpose of our meeting was to develop a uniform and internationally acceptable system of information exchange between UAE and Pakistan... which was not there,” Zaidi said at a joint-presser alongside adviser to the prime minister on finance, Dr. Abdul Hafeez Sheikh, in Islamabad. “This cooperation will provide valuable information to the tax machinery.
UAE authorities could not be immediately reached for comment for this article.
Zaidi said Pakistan also brought up the abuse of a residency permit, called the iqama, which allowed expats to live and work in the UAE. Under UAE law, foreign nationals obtain an iqama on the basis of investment beyond a certain level.
Pakistani tax authorities believe Pakistanis have obtained UAE iqama permits through a Residence by Investment (RBI) initiative in order to park tax-evaded and ill-gotten money in the Emirates.
“We believe that iqama is a visit visa and should not be used as a tax residency substitute,” Zaidi told reporters. “Because when we go for tax information of Iqama holders under the CRS, they [UAE authorities] used to refuse us. After our negotiations, UAE has agreed to correct that position.”
“Now we will have another meeting next month in Islamabad,” Zaidi said.
Islamabad-based economist, Zia Banday, said the UAE’s cooperation with Pakistan on the ease of data exchange would boost its image as a ‘clean’ country.
“It will present us as a clean country... that does not allow dirty money to enter its territory,” Banday said, adding that the move would deter people in Pakistan from evading taxes and moving illegal money to the UAE.
“Pakistan may not get immediate gain by getting its money back tomorrow, but the fear it creates will act as a deterrent for people to follow rule of law,” he said, adding that he hoped the government would expand similar cooperation mechanisms with other countries known to be tax havens around the world.