KARACHI: The Finance Bill 2016 proposes to enable the Federal Government to enter into a tax treaty or tax information and exchange agreement or multilateral convention or inter government agreement or similar agreement or mechanism for the avoidance of taxation or exchange of information for prevention of fiscal evasion.
This extension of eligibility has been made to enable the Federal Government to enter into arrangements with organizations, such as OECD, etc. in the matters of exchange of information relating to double taxation and prevention of fiscal evasion in addition to arrangements and agreements with other Governments.
Under the present apparatus of international tax arrangements, all the Governments should have mechanisms for collating and exchanging information with other Governments and supranational bodies, etc.
Another important change has been proposed in this section whereby the information obtained through the aforesaid agreements or treaties shall remain confidential.
Previously, such confidentiality was not applicable in case the information was required for certain specified purposes as laid down in section 216(3) which inter alia include SECP, SBP, Civil Courts, etc.
The rationale of removing the right of using such information as is presently contained in provision need to be examined as after the proposed amendment there could be restriction of the use of information by the relevant respective authorities in Pakistan.