FBR says Benami law operational from Friday

After a delay of more than two years, the Federal Board of Revenue (FBR) has announced that the Benami Act will become operational from Friday (February 8), allowing the government to confiscate property and bank accounts registered with fictitious individuals.“We have drafted rules for the implementation of the much-awaited Benami Act and forwarded to the Law Division”, said FBR member for Inland Revenue (IR) Policy Dr Hamid Ateeq Sarwar.He said that the law, which is in line with the government’s efforts to document the economy, will allow the authorities to take strict action against movable and immovable assets registered with fictitious individuals in order to avoid taxes.The legislation was passed by parliament in January 2017, but was not put into action due to delays in the finalisation of rules.Asked whether the government will provide amnesty to individuals who registered their assets under fictitious persons before the enactment of law, Sarwar said that he is not aware of such a decision at the moment.Highlighting the issues arising from an overlap in the collection of sales tax on services between the federal and provincial revenue authorities, he said the issue will be taken up during the National Finance Commission meeting.Sarwar suggested that the collection of sales tax should either be solely handed over to the FBR, or a single tax authority should be set up for the collection of taxes across the country.He said that the overlap is creating undue hurdles for businesses across the country.As part of ease of doing business, Sarwar said that the federal government will take up this issue with the provinces.To a question, he said that the FBR received Rs12bn in taxes from property transactions, adding that “we expect this collection to reach Rs15bn by June end”.He also said that the valuation table for taxation is still far behind the market value.FBR member for IR Operations Seema Shakil said that around 6,000 notices were issued to high net-worth individuals (HNWI) in the past two months.Of these, she said that the tax demand was of Rs6bn in 204 cases, whereas recovery made so far after the assessment was at Rs2.6bn.