Modalities for sharing depositors’ data have been finalized by the Federal Board of Revenue (FBR) and the Pakistan Banking Association (PBA).
On Thursday, the FBR officially alleged that this long-awaited problem had been resolved. In an official statement, the FBR and the Pakistan Banks Association (PBA) finally agreed on the implementation modalities of the Income Tax Ordinance, 2001, Sections 165 and 165A.
Banks will begin to provide information on cash withdrawals , deposits, credit card payments and debt gains to the FBR u/s 165 and 165A of the Income Tax Ordinance, 2001 via the FBR’s IT solution.
This technical solution will provide banks with an interface through which banks will share the relevant information in real time with the FBR. By using the interim IT solution developed by the FBR IT team, the banks agreed to share data with the FBR from 18.09.2020.
The Advisor to the Prime Minister on Austerity & Institutional Reforms, Dr. Ishrat Hussain, played a key role in ironing out the long-standing problems between the FBR and banks. In August 2020, the FBR issued draught rules under the Finance Act 2020 to seek banks’ information on individuals who deposited Rs10 million or more in a month’s account or made Rs200, 000 in credit card payments.
The debt gain and details of account holders who have withdrawn Rs1 million or more in one month will also be shared on the prescribed forms with the FBR. With the approval of parliament on the eve of the budget for 2020-21, the government has introduced amendments to the Finance Act 2020.
Under the new rules for banks, the reporting banking company shall provide the information required to be provided pursuant to Section 165A of the Income Tax Ordinance in the manner specified in the statement of deposits of account holders, the statement of credit card payments, the statement of cash withdrawal and the statement of profit on debt.
The reporting banking company shall provide that information as specified in the notice issued pursuant to Section 165-A of the Ordinance.
Each officer of the banking company shall provide deposit statements, credit card payment statements and cash withdrawal statements as specified in Form A, Form B and Form C respectively to the FBR monthly account holders for the immediately preceding calendar month within seven days of the end of the preceding calendar month.
The CRS XML Schema prescribed by the Global Forum of Organizations for Economic Cooperation and Development (OECD) will be submitted to the AEOI portal on the FBR’s official website for the common reporting standard reports.