Pakistan signs OECD convention on tax matters
ISLAMABAD: Pakistan has signed the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters after signing the convention that would help in exchanging information about untaxed money of Pakistanis, amounting to billions of dollars stashed in foreign banks.
Minister for Finance and Economic Affairs Ishaq Dar and Secretary General of the Organisation for Economic Cooperation and Development (OECD) Angel Gurria signed the convention in Paris.
The Convention, to which currently over 80 countries are signatory would facilitate global cooperation to combat tax evasion.
The OECD’s invitation to Pakistan to sign the Convention became possible after over two years, during which peer reviews were conducted and amendments were introduced to Pakistan’s domestic income tax laws to meet requirements of the organisation.
It demonstrates Pakistan’s strong commitment to adopt international best practices in the field of tax matters and join the multilateral fight against tax evasion through continuous and mutual exchange of information.
“Through the Multilateral Convention, Pakistan shall be able to exchange information, including information on banking details, on reciprocal basis, with other partner countries, which is foreseeable, relevant for the administration or enforcement of its tax laws.” say the official documents.
It is most comprehensive multilateral instrument available for all forms of tax cooperation to tackle tax evasion, the documents added. The Convention facilitates international cooperation for a better operation of national tax laws, while respecting the fundamental rights of taxpayers.
The convention provides for all possible forms of administrative cooperation between states in the assessment and collection of taxes in particular with the view to combat tax avoidance and evasion. Pakistan and other OECD member countries would be facilitated in the following three ways.
As such, Pakistan will be receiving information annually in a few years time on the banking and other details of its nationals and tax residents from other countries signatory to the Convention.
According to an official handout, the finance minister also held a bilateral meeting with the OECD secretary general to discuss ways and means to further strengthen the existing ties between Pakistan and the OECD.
He conveyed Pakistan’s desire to become OECD’s key partner country. He reaffirmed Pakistan’s determination to cooperate with the OECD in all important areas of mutual interest.
Dar informed the secretary general about the various economic and fiscal reforms undertaken by the government to stabilise Pakistan’s economy, and the increased budgetary support for health and education sectors.
He also invited him to visit Pakistan. The secretary general congratulated the finance minister on historic signing of the Convention, and for playing a central role in bringing about economic turnaround in Pakistan.
He acknowledged that Pakistan had made great strides in economic field, which, he said, deserved accolades from international financial institutions. He also invited Pakistan to various OECD global forums and meetings.
The OECD is an intergovernmental forum, which focuses on issues including trade, taxation, environment, technology and education. It has 35 member countries in Europe, Americas and Asia Pacific. Pakistan, though not a member country, is regularly invited to its various committee meetings.
Source : Agencies