More than a year since issuing notices to the Pakistanis mentioned in the Panama Papers, the country’s tax officials are losing hope of obtaining information about the money used to buy assets abroad.
In September 2016, the intelligence directorate of the Federal Board of Revenue (FBR) issued 344 notices to owners of the offshore companies mentioned in the Panama Papers but the tax officials received a very poor response.
The poor response has discouraged the tax officials so much that they have not opted to issue any notices to those named in the recently revealed Paradise Papers. The officials feel that such revelations make good headlines but hardly provide sufficient grounds for the authorities to tax people.
Official data show that show-cause notices mentioning penalties have been issued only to 10 persons in the one year since emergence of the Panama Papers. This shows that owing to several reasons the compliance is negligible.
In the first show-cause notice, the penalty mentioned stood at Rs25,000 as per the income tax ordinance.
Data available show that only 72 persons confirmed their ownership of offshore companies. However, they did not admit to their assets.
Twelve individuals were reported to be dead in the responses received from their widows. As many as 55 persons denied that they had links with the offshore companies.
Eighty-four notices could not be delivered on the addresses mentioned in the Panama Papers. However, the tax department is in correspondence with 57 individuals.
Fifty-four individuals replied that they did not fall under the jurisdiction of the Pakistani tax authorities because they were non-resident Pakistanis.
An official said the Panama Papers experience had shown that leaks only helped in identifying the names of certain people. The challenge before the FBR was to obtain details of the assets accumulated by such people, which were not shared in documents like the Panama Papers.
During investigations it was found that an offshore company was established in the name of a watchman. He was shocked to know that he owned an offshore company, the official said.
What is Panama paper case?
The Panama Papers case (officially titled Imran Khan Niazi v. Mian Muhammad Nawaz Sharif) or the Panamagate case was a legal case before the Supreme Court of Pakistan, heard between 1 November 2016 and 23 February 2017. The case was brought to court by Pakistan Tehreek-e-Insaf party leader Imran Khan. It alleges money laundering, corruption, and contradictory statements by Nawaz Sharif, then-incumbent Prime Minister of Pakistan in the aftermath of the Panama Papers leak, which uncovered links between Sharif's family and eight offshore companies.
The Court reserved its judgment on 23 February 2017. The case has been described as the most publicized in Pakistan's history, as well as a "defining moment" for the country. On 20 April 2017, the court announced the formation of a Joint Investigation Team (JIT) to probe the Sharif family's involvement in corruption as stated in the Panama leaks.
On 28 July 2017 the Supreme Court of Pakistan disqualified Sharif from holding public office in a unanimous verdict.