The Multilateral Convention on Mutual Administrative Assistance in Tax Matters, signed by Finance Minister Ishaq Dar on 14 September 2016 in Paris, is likely to be effective from 2017-18. Sources told Business Recorder that Finance Ministry informed a recently held Cabinet meeting that Pakistan would be able to exchange information spontaneously without prior request, on request and automatically, including the one on banking details, from 2017-18 on a reciprocal basis with other partner countries which is foreseeably relevant for the administration or enforcement of its tax laws; and that the necessary legal, administrative and IT apparatus was being put in place for effective automatic exchange of information.
The Finance Act 2016 incorporated an amendment to qualify for the membership of OECD and subsequent sharing of information with member countries including banking information. Official documents reveal that Finance Minister took approval from the Cabinet to become a signatory to the multilateral Convention on Mutual Administrative Assistance in Tax Matters and argued that it would facilitate Pakistan in international cooperation as well as improved operation of domestic tax laws. The Cabinet had approved signing of the Convention in its meeting on 20th January, 2014.
The Cabinet was further informed of (i) amendments in tax laws, particularly with reference to confidentiality provisions, membership of the Global Forum on Transparency and Exchange of Information and its Peer Reviews; and (ii) Pakistan's rating by the Global Forum as Largely Compliant on matters relating to transparency and exchange of information for tax purposes.
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