ISLAMABAD: Minister for Finance, Senator Muhammad Ishaq Dar has categorically rejected a statement of Chairman Pakistan Tehreek-e-Insaf (PTI), Imran Khan in which he alleged that the minister had transferred $ 4 million to his son in Dubai for avoiding taxes.
In a letter written to PTI Chief, the minister termed the statement totally fallacious, highly preposterous, nothing but a figment of imagination and prima facie tainted with malafide.
“Let me inform you that I have never transferred to my son even a single rupee from Pakistan to Dubai. On the contrary I have in fact till date received around 4 million US dollars from my sons in Dubai, a fact which you have twisted for political mileage,” he added.
The minister said that he had gifted certain amount to his sons from out of his lawful earnings abroad, who are independent, adults and started their professional careers in Dubai.
He said he had also given them around US $ 4 million as loan which had since been fully repaid (as referred above) by them through proper banking channel, meaning that the amount reached Pakistan, added to the forex reserves of the country.
Being a family transaction, with no nexus with any tax implication in Pakistan or Dubai, it is unfortunate that this transaction had been dragged in public domain to raise unsubstantiated allegations against me who pays his taxes regularly and faithfully, he added.
Ishaq Dar said that being member of the Parliament, he had been regularly depositing his returns with the tax authorities and details of all assets had been regularly reported in his annual returns of ‘statement of assets and liabilities’ with the Election Commission of Pakistan.
Addressing PTI chief, the minister said that Imran Khan’s statement, therefore was not only false and fabricated but also had no nexus whatsoever with verifiable facts and public record.
The minister said that government was committed to get access to information from Switzerland and detail of deposits of Pakistanis in its banks. Pakistan had a Tax Treaty with Switzerland and as per
its Article 25, information could be obtained from Swiss government on case to case basis.
However, he said that Switzerland was not bound to provide information which was in possession of their banks and financial institutions covered under their bank secrecy laws.
Feeling the need for developing instruments for better access to information, Federal Board of Revenue (FBR) on October 11, 2012 requested the then finance minister for approval to renegotiate the existing Tax Treaty, however, the required approval was not granted, he added.
Ishaq Dar said that on assumption of office as finance minister, he restarted the process, obtained Cabinet’s approval and the formalities for renegotiating the treaty were completed.
He said that negotiations were started by FBR to revise the existing Treaty in August 2014.
First round of negotiations had been completed and currently FBR’s request for second round was pending with the Swiss authorities.
As and when the proposed amendments were agreed to by the two countries, Switzerland would be obliged to provide information about banks and financial institutions irrespective of banks’
secrecy laws on a case to case basis, he added.
Ishaq Dar said that government was also pursuing full membership of ‘Global Forum on Transparency and Exchange of Information’ for tax purposes.
“Due to our active participation in the process, we were able to complete 1st phase of Peer Review in October 2014, and the 2nd phase will start in July-August 2015,” he added.
After completion of this process Pakistan would be eligible for full membership leading to Automatic Exchange of and Access to Information from more than 121 countries across the globe.
The government was also in the process of acceding to the Convention on Mutual Administrative Assistance in Tax Matters enabling Pakistan to obtain information on tax matters, he said. Requisite documentation in that behalf had been filed with respective institutions.
“This will also facilitate getting information on tax evasion,” he added.
The minister said that the aforesaid measures would lead to more transparency and access to such information which would arrest flight of capital and retrieval of ill-gotten and black money.
“I hope this information will set the record straight and remove any misgivings in your mind that I am in any way hindering the signing of the Tax Avoidance Treaty,” he wrote to Imran Khan.
The minister said that he was in fact faithfully pursuing with full vigour that case in the national interest.
Ishaq Dar said the PTI chief had misrepresented the facts on Friday (yesterday) which served no national purpose.
“As head of a political party, you are expected to demonstrate responsibility and to verify the facts before making such public statement,” he added.