KARACHI: The head of Pakistan’s Federal Board of Revenue (FBR) on Saturday outlined measures the country is taking to try and get off the grey list of countries deemed non-compliant with anti-money laundering and terrorist financing regulations.

The Financial Action Task Force (FATF) added Pakistan to the list last June, making it harder, in theory, to access international markets and bringing extra scrutiny from regulators and financial institutions that could potentially chill trade and investment and increase transaction costs.
FATF will review its decision to keep, or remove, Pakistan on the grey list in May this year.

“We have implemented currency declaration systems at airports of the country,” FBR chairman Mohammad Jehanzeb Khan said while speaking at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Saturday. “Measures have reduced the smuggling of currency to a large extent.”

He said an “advance passenger information system” had been implemented with two airlines, namely Pakistan International Airlines and Emirates, and would be extended to other airlines soon.

“We will get information on suspected passengers 4-5 hours before they travel, that would give us enough time to investigate,” he said.

Pakistan is also under investigation for “benami accounts,” or accounts opened in other people’s names ostensibly to dodge taxes. But the FBR chief said the government had implemented the Benami Transaction (Prohibition) Act 2017 earlier this week which would allow authorities to confiscate benami properties and bank accounts.

“The law has been implemented, which is very clear that any benami account and properties registered would be confiscated,” Khan said.

The FBR chief said Pakistan was now PKR 220 million behind its tax target, which was still 14 percent higher than the last fiscal year. The PKR 4.8 trillion revenue collection target would be recovered in the remaining four months of the current fiscal year, Khan said.

Pakistan’s active taxpayers list contains only 1.63 million taxpayers out of a population of 208 million.

“The process of digitalizing the data is underway and in some cases we have detected the cases where the lifestyle of person does not match with the tax documents filed,” Khan said. “Data of 6,000 plus people as a test case has be collected and notices issued. We generated the demand of PKR 3 billion, and PKR 2 billion has been recovered. Such cases are in the hundreds of thousands.”