Probe into use of gift scheme for money laundering

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Anti money laundering (AML) cell of the Intelligence and investigation inland revenue has now started investigating the families who's wealth have substantially increased as a result of gifts on which tax remained unpaid. 

In a recent article published in daily Dawn, it has been claimed that certain wealthy people of Pakistan have laundered around 102 bilion Rupees through the prescribed gift scheme under the Income Tax Ordinance, 2001 in Tax Year 2016.

In current Income Tax law gifts are exempted from tax and therefore large number of individuals have availed this facility transferring income, assets and wealth without contributing the same into the economy. 

Sources of daily dawn confirmed that around 3000 people have laundered money by showing the same as gift received from individual family members and relatives not covered under the ambit of taxation.
It was observed In certain cases that the gifts declared have reached up to 2 billion Rupees received by a single individual.

In cases where there is substantial evidence that a “gift back arrangement” has been employed in order to avoid tax than the Assets of the Concerned individuals would be confiscated under Anti Money Laundering Act 2010. Moreover, criminal offences and references would also be filed against the said individuals.

It must be noted that punishment with rigorous imprisonment of up to 10 years and heavy fine as well as forfeiture of the properties as a result of “gift back arrangements” under the anti money laundering law can be imposed to the convicted individuals if proven guilty.


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source: https://www.dawn.com/news/1337061


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