National Assembly Standing Committee on Finance has approved “Benami Transaction (Prohibition) Bill, 2016” with some major modifications that no person shall enter into any benami transaction and hold benami assets.
The committee held here in the Parliament House was chaired by Qaiser Ahmad Sheikh, which approved the “The Benami Transaction (Prohibition) Bill, 2016, with observations from Syed Naveed Qamar of PPP.
The committee considered the “The Benami Transaction (Prohibition) Bill, 2016″ clause by clause. After a threadbare discussion, the Committee unanimously recommended that the National Assembly might pass the Bill with some amendments.
The government claimed that the bill would also deal with offshore companies, as currently there is no law in the country to deal with it. During a detailed discussion, FBR officials responded to various queries in benami transactions under the said Bill.
A senior FBR official informed the committee that all benami transactions to be carried out in future will be considered as illegal and covered under the said Bill.
From the day of enforcement of the new law by the federal government, if anyone is holding the Benami properties/assets, he has to transfer such properties in his or her name to avoid action against him under the law.
On the day of notification of the new law, the person holding Benami properties has to transfer such properties in his or her name or actual owner.
Responding to different queries on the offshore companies, FBR officials said that the Bill would be applicable on global assets held by Pakistanis aboard.
FBR officials informed the committee that the words ”benami transaction property” mean the property and assets which have been purchased in the name of some person other than the person who has financed it.
The person who has rendered the required money for the said purchase has not purchased it in his or her name but in the name of some other person.
The draft proposes up to seven years rigorous imprisonment and a fine for people who park their undeclared money in real estate sector in the name of other persons.
The legislation defines the Benami transaction as an arrangement where property is held by a person (other than in fiduciary capacity) on behalf of another person who has paid for it; or the transaction is made for a property in a fictitious name; or the owner of the property is not aware of or denies knowledge of such ownership.
Asad Umar and Syed Naveed Qamar told the senior government officials, who were present in the committee, that the draft law should also cover existing benami properties.
“What we are talking about new benami transaction which will be illegal after the law is approved but what about those who already have benami properties,” Asad Umar said, adding, “People have huge houses in the name of their cooks and they can enjoy that status as the law is effective on new benami transactions.”
Later, it was agreed to amend that wording to include the words that “holding such properties too would be a crime” and the new description is “No person shall enter into benami transaction and hold benami assets.”
Mian Abdul Manan said, “Yes – those who have such properties should get it in their name and than gift it to their servant – at least it will be clear in the documents as how a servant or a minor could own huge properties”.
Similarly, the draft exempted religious institutions and religious trusts from its domain and after objections by the members belonging to all the parties – this exemption has been omitted from the draft.
The draft law has strict provisions to confiscate benami properties and stiff penalty for entering into such transactions.
As per the draft law prohibiting the Benami transactions and holding such properties any person, required to furnish information under this Act, knowingly gives false information to any authority or furnishes any false document shall be punishable with rigorous imprisonment for a term which shall not be less than six months but which may extend to five years and shall also be liable to fine which may extend to 10 per cent of the fair market value of the property.
Apart from minor observations by Syed Naveed Qamar, the draft was approved amicably while Abdul Rashid Godil of MQM asked a simple query.
He asked: “Do they (FBR) have the capacity and will to get hold of benami transaction and catch the influential including their own senior officers who too must be maintaining something?” Godil further said FBR had not taken any action against 400 persons whose names appeared in the Panama Leaks.
He asked: “Then how will FBR take action against benami transaction?” Secretary Finance Waqar Masood said that benami transactions would become illegal with the passage of the aforesaid bill.
The draft benami prohibition bill had been pending in the Committee for almost four months, after getting through from the NA Standing Committee it will be forwarded to the National Assembly and after being approved from there – the draft will be sent to the Senate.
The committee has approved the amendment proposed by member Asad Umar to replace benami transaction with benami property.
Chairman Federal Board of Revenue (FBR) Nisar Khan said that an amendment would be incorporated with the consultations of the Ministry of Law and Justice.
He informed the committee that Pakistan is the only country where there is no law to deal with benami transactions and bank accounts.
The bill would help in dealing with tax evasion, corruption, future benami transactions and money being used in terrorism, he added.
Meanwhile, Committee Chairman Qaiser Ahmed Sheikh decided to invite Governor State Bank of Pakistan and President National Bank of Pakistan to the next meeting.
Asad Umar claimed that SBP is not providing details of expatriate Pakistanis who made investment in Pakistan. He demanded that committee should take a briefing on the Panama Leaks from the FBR and SBP.
He said that the government should also inform the committee about latest development regarding $200 billion of Pakistanis stashed in Swiss banks.
The meeting was attended by Daniyal Aziz, Muhammad Pervaiz Malik, Rana Shamim Ahmed Khan, Mian Abdul Mannan, Shaza Fatima Khawaja, Leila Khan, Syed Naveed Qamar, Asad Umar and Abdul Rashid Godil, MNAs and senior officers from Ministry of Finance and Revenue. -Business Recorder