Proposal afoot to bring tax evaders of Rs 10 million into AML regime: Senate body told

Shahid Hussain Asad, Senior Member (Inland Revenue), Policy Federal Board of Revenue (FBR), on Wednesday said that there was a proposal to bring the persons committing tax evasion of at least Rs 10 million within the ambit of Anti Money Laundering (AML) regime.
During the meeting of the Senate Standing Committee on Finance here at the Parliament House on Wednesday, FBR's Member Inland Revenue (IR) Policy told the committee that there was a limit of Rs 10 million for invoking proposed AML legislation for which the per annum income would be required to be Rs 30 million for committing tax evasion of Rs 10 million. "It is a very high limit of tax evasion proposed to be made part of the AML law. This means the person should have Rs 30 million of annual income. Such high income earners, if commit tax evasion, can be checked under the new AML regime. This would not cover any small and medium taxpayers earning small income," he told the committee.
He pointed out that before prosecuting under the proposed AML laws, two forums of Commissioners' Appeal and Appellate Tribunal would be exhausted. If these two appellate forums have confirmed the tax evasion for the purpose of money laundering, only then action can be taken against any person under the AML.
The FBR senior officials showed their willingness to raise the limit of Rs 10 million under the proposed bill but fiscal offense could not be excluded from this bill under international obligations. Shahid Hussain Asad added that the case of money laundering cannot be framed merely on the basis of notice issued by the income tax officer under the AML law.
Chairman Senate Standing Committee on Finance Saleem Mandviwalla said that it was their concern that the government inserted tax regime into AML (amendment) Bill 2014 as the PPP-led regime had excluded these clauses during its rule. "Even accusation of money laundering against an individual will tarnish image of the person," he commented.
Deputy Governor SBP Saeed Ahmad told the committee that in some cases the culprits used their cooks, drivers and wife to channelize their money. "Whenever there will be any unusual or exceptional movement in your banking accounts, it could trigger opening of Suspicious Transaction Reports (STRs)," he added.
He asked the committee chairman to suggest a convenient date for holding committee meeting in SBP head office Karachi for further discussion on the issue and explore some middle ground to address the concerns of members on making tax regime as part of the AML as well as to fulfill international commitments. The Financial Monitoring Unit (FMU) head Mansoor Ali told the committee that after receiving STRs from banking and other channels the FMU analysed transactions in details and in case of finding any substantial evidence the STRs forwarded to law enforcing agencies including FIA, NAB, Customs etc.