The government has amended the Income Tax Ordinance 2001 and inserted section 165A, whereby banks would now be bound by law to provide information including online access to bank's central database containing details of its accountholders and all transactions made therein, to the tax authorities.
The Federal Board of Revenue has been given access to the bank's database through Finance Bill (2013-14). The proposed section has been given overriding effect to all other laws including Banking Companies Ordinance, 1962, the Protection of Economic Reforms Act, 1992, the Foreign Exchange Regulation Act, 1947 and the regulations made under the State Bank of Pakistan Act, 1956.
As per new section "165A" (Furnishing of information by banks), (1) Notwithstanding anything contained in any law for the time being in force including but not limited to the Banking Companies Ordinance, 1962 (LVII of 1962), the Protection of Economic Reforms Act, 1992 (XII of 1992), the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the regulations made under the State Bank of Pakistan Act,1956 (XXXIII of 1956), if any, on the subject, every banking company shall make arrangements to provide to the Board in the prescribed form and manner,-
(a) online access to its central database containing details of its accountholders and all transactions made in their accounts; (b) a list containing particulars of deposits aggregating rupees one million or more made during the preceding calendar month; (c) a list of payments made by any person against bills raised in respect of a credit card issued to that person, aggregating to rupees one hundred thousand or more during the preceding calendar month;
(d) a consolidated list of loans written off exceeding rupees one million during a calendar year; and (e) a copy of each Currency Transactions Report and Suspicious Transactions Report generated and submitted by it to the Financial Monitoring Unit under the Anti-Money Laundering Act, 2010 (VII of 2010).
(2) Each banking company shall also make arrangements to nominate a senior officer at the head office to co-ordinate with the Board for provision of any information and documents in addition to those listed in sub-section (1), as may be required by the Board. (3) The banking companies and their officers shall not be liable to any civil, criminal or disciplinary proceedings against them for furnishing information required under this Ordinance. (4) Subject to section 216, all information received under this section shall be used only for tax purposes and kept confidential," the Finance Bill added.