PTBP Web Desk
The Federal Board of Revenue (FBR) has made significant strides in combating tax evasion during the fiscal year 2023-24 by strengthening its international tax information exchange initiatives. Under these efforts, the FBR processed 30 requests for information from global tax jurisdictions and sent 17 requests to various countries. This proactive approach underscores the FBR’s commitment to leveraging global networks to improve domestic tax compliance.
A report by the FBR highlights the progress made in the past year through international cooperation. The exchange of tax-related information is a crucial tool in addressing tax evasion, particularly for individuals and corporations with offshore accounts. By collaborating with tax authorities worldwide, the FBR aims to create a transparent tax system and ensure compliance with international standards.
The data indicates that the FBR processed 30 inward Exchange of Information (EOI) requests, responding to inquiries from international tax jurisdictions. Additionally, the agency sent 17 outward EOIs to various countries, seeking details to investigate cases of potential tax evasion.
Aligned with international transparency frameworks, the FBR has actively adopted the country-by-country (CbC) reporting system. This initiative is designed to ensure that multinational corporations accurately report their financial activities across all jurisdictions where they operate.
The report revealed that the FBR made significant progress in implementing local filing transmissions under the CbC reporting system. Specifically, the agency processed 41 records of “outward transmission of local filing,” sharing an impressive 1,426,252 records related to local transactions. Additionally, 579,748 records were processed for the inward assignment of reciprocal filings.
These figures reflect the FBR’s commitment to addressing issues such as profit shifting and base erosion, both of which undermine corporate tax compliance. By sharing and receiving comprehensive financial data, the FBR aims to ensure a fair and transparent tax system for all stakeholders.
One of the highlights of the report is the FBR’s progress in implementing systems for the automatic exchange of information. This initiative, developed under the guidelines of the Organisation for Economic Co-operation and Development (OECD), enables the FBR to access detailed financial data of Pakistani taxpayers with assets held abroad.
Automatic information exchange allows the FBR to track offshore accounts and undisclosed financial holdings, thereby curbing tax evasion and promoting global tax compliance. According to the FBR, these systems will play a pivotal role in fostering international cooperation and ensuring that tax obligations are met across borders.
The data exchange initiatives reflect the FBR’s growing focus on leveraging international partnerships to strengthen domestic tax compliance. By sharing information with global tax jurisdictions, the agency is not only addressing tax evasion but also ensuring that multinational corporations fulfill their tax obligations in all operating countries.
Such collaborations are vital for creating a robust tax system that minimizes opportunities for tax evasion and promotes equitable economic growth. The FBR’s efforts demonstrate its commitment to aligning with global standards and combating financial malpractices through innovative measures.
Looking ahead, the FBR plans to further enhance its international cooperation efforts by expanding the scope of information exchange and adopting advanced data-sharing technologies. The agency’s focus on transparency and compliance will likely encourage greater trust among taxpayers and improve revenue collection.
By actively participating in global tax initiatives, the FBR aims to solidify its position as a leader in tax administration. These efforts are expected to contribute significantly to Pakistan’s economic stability and ensure that all taxpayers, whether individual or corporate, are held accountable.
