Discussions on Benami bill deferred on absence of finance minister, FBR chairman

National Assembly Standing Committee on Finance Wednesday deferred Benami Transaction (Prohibition) Act, 2016 (Government Bill) till next meeting on the request of PPP Member of the committee, who pleaded not to pass the bill in the absence of Finance Minister and Chairman Federal Board of Revenue (FBR). The 36th meeting of the Standing Committee on Finance of the National Assembly was held at Parliament House under the Chairmanship of Qaiser Ahmad Sheikh, MNA.
Syed Naveed Qamar MNA said that the important bill like Benami Transaction (Prohibition) Act, 2016 (Government Bill) cannot be passed in the absence of Finance Minister, Secretary Ministry of Finance and Chairman Federal Board of Revenue (FBR). The bill should be deferred till next meeting for having detailed discussion on the bill.
Chairman of the committee Qaiser Ahmad Sheikh said that it is a very important bill and I endorse the viewpoint of Naveed Qamar that the government should show seriousness while passing such important piece of legislation.
The Committee approved / confirmed the minutes of last meeting held on 15th June, 2016. The Committee members have shown their displeasure on the absence of senior representative from Ministry of Finance, Revenue & Federal Board of Revenue (FBR). The Committee decided to defer the agenda items for its next meeting.
Chief Income Tax Policy Vishno Alias Raja Qavi of Inland Revenue Service informed the committee that threadbare discussion on the said Bill have already been undertaken, now the bill needs approval. The bill has already been deferred many times by the committee, he added.
In a written brief to the committee, the FBR said that the problem of property held Benami is causing concern to the Tax Authorities and past practice and experience shows that Benami transaction have often been resorted to for furthering illegal or questionable objects, including the evasion of taxes. The assets, which are taken through illegally earned money, can be used for evasion of material amounts of taxes or something more serious like financing terrorism.
The proposed legislation for regulation of the Benami transactions was initiated in 2008 by the Ministry of Finance; however the legislation could not materialise. The proposal has also been forwarded by Tax Reform Committee in the recent consultative process of collecting budget proposals. Moreover there is a realisation that the Benami Transactions (Prohibition) Act is in operation in neighbouring country (India), while Pakistan is two decades late on the issue, FBR said.
The legislation defines the benami transaction as an arrangement where property is held by a person (other than in fiduciary capacity) on behalf of another person who has paid for it; or the transaction is made for a property in a fictitious name; or the owner of the property is not aware of or denies knowledge of such ownership. The Bill prohibits all persons from entering into Benami transactions. Any property held in "Benami" shall be confiscated by the Federal Government. Once a property is confiscated, all rights and title of such property shall vest completely in the federal government and no compensation shall be payable.
The provisions of the proposed Act will not apply to any transaction entered into by an individual in the name of his spouse, brother or sister, or any lineal ascendant or descendant. The Bill restricts the right of any person who is claiming to be the real owner to recover such property. In addition, no person shall be able to retransfer such property to the beneficial owner.
The proposed legislation shall not be applicable retrospectively and it shall be applicable to those transactions which will be executed after the said legislation will come in to force. Any person aggrieved by an order of the Adjudicating Officer shall have the right to appeal to the Federal Appellate Tribunal proposed to be headed by a serving or retired Judge of a High Court. Appeal against the orders of the Tribunal shall be before the High Court. In addition to that, Special Courts will be established for trial of an offence punishable under the proposed legislation.
The bill shall strengthen the law through empowering provisions prohibiting holding property as benami and restrict the right to recover or transfer property held in benami. The bill shall also establish Adjudicating Authority, set-up Appellate Tribunal and specify the penalty for entering into a benami transaction and provisions for confiscation of benami properties, FBR added. Meeting was attended by Rana Shamim Ahmed Khan, Mr Muhammad Pervaiz Malik, Sardar Muhammad Jaffar khan Leghari, Ms Shaza Fatima Khawaja and Syed Naveed Qamar, MNAs.