ISLAMABAD: A Senate panel on Wednesday objected to the confiscation of Benami properties under a proposed law, frustrating a move initiated to prevent people from keeping assets in others’ names – a practice that has been going on for decades to hide ill-gotten money.
The Senate Standing Committee on Finance raised half a dozen objections while discussing the Benami Transactions Prohibition Bill 2016, notably to the clause seeking confiscation of Benami properties and the definition of the property. It deleted a couple of clauses but deferred voting on the other two till next meeting.
Benami Transactions Bill 2016: What is it worth in Pakistan
During the proceedings, the members belonging to Pakistan Tehreek-e-Insaf and PML-N accused each other’s leadership of owning Benami properties. PTI Senator Mohsin Aziz claimed that after Qatari prince’s letter on Panama papers issue, it was clear that London properties were Benami transactions till 2006.
PML-N Senator Mushahidullah Khan accused PTI’s Jahangir Tarin and Imran Khan of owning Benami properties.
The government has proposed in the bill that after the enactment of the law, any property, which is the subject matter of Benami transaction, will be confiscated.
The confiscation of assets is a very harsh punishment, said Senator Mohsin Aziz. Other members proposed that instead of confiscation, fines and penalties should be imposed on persons who held Benami assets.
Standing Committee Chairman Senator Saleem Mandviwalla said the decision whether to delete this clause from the bill would be taken at a later stage.
Purpose of Benami bill
Benami assets are those that are not in the owner’s name and are aimed at concealing the real ownership. Benami transactions are one of the sources of circulation and investment of black money.
The government had presented the Benami bill in parliament as part of a commitment to the International Monetary Fund (IMF) in order to curb this practice.
NA panel approves bill prohibiting people from keeping assets in others’ names
Once approved by parliament, the law will be applicable to past and future transactions. However, the past transactions would not be subject to punishment, provided the beneficial owners duly declare such properties after the enactment of the law.
The National Assembly has already passed the Benami Transactions Prohibition Bill in August this year and after amendments proposed by the Senate panel, the bill will be sent back to the National Assembly for second voting.
In case, the National Assembly refuses to accept these amendments, the bill will go to the joint sitting of parliament for a vote.
The National Assembly Standing Committee on Finance had also introduced 11 amendments to the original bill. The amendments had strengthened the proposed piece of law, unlike the Senate panel amendments that would significantly weaken it.
The original bill empowers the government to confiscate Benami properties and the violators could face imprisonment of up to seven years. Any person who enters into a Benami transaction will be liable to be taxed at the rate of 25% of the fair market value of the property.
So far, different Pakistani laws protect, fully support and recognise Benami transactions, according to findings of the government-constituted Tax Reforms Commission.
Its report says Section 82 of the Trust Act 1882, Section 66 of the Court of Civil Procedures and Section 41 of the Transfer of Property Act 1882 protect the Benami transactions.
PTI seeks to bring offshore assets in law’s ambit
The standing committee also objected to the definition of property, seeking exclusion of movable assets like cash and securities from its scope. It deleted a clause that was seeking prohibition of retransfer of Benami properties. The Senate panel also stopped the government from hiring retired persons to adjudicate the law.
The panel also reduced the term of office of the chairperson and members of the adjudicating authority from the proposed five years to three years. It also introduced checks and balances on the Federal Board of Revenue, which will implement this law.
Published in The Express Tribune, November 17th, 2016.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
Courtesy : Express Tribune