Through the Finance (Supplementary) Bill, 2021, the FBR has been empowered to disclose information of politically-exposed persons. The amendment has been propped whereby the particulars of high-level public officials and public servants in BPS-17 and above, their spouses, their children, or Benamidars, shall not be precluded from disclosure by section 216(1) of the Income Tax Ordinance, 2001.

Explaining the Finance (Supplementary) Bill, 2021, Ashfaq Tola, a leading tax expert, explained the proposed amendment made in section 216 of the Income Tax Ordinance, 2001.

The section 216 of the ITO governs the disclosure of information by a public servant.

The section 216(3) provides for situations where the disclosure of particulars cannot be precluded by Section 216(1).

The bill proposes an amendment whereby, the particulars of high-level public officials and public servants in BPS-17 and above, their spouses, their children or Benamidars, or any person in relation to whom the aforementioned persons are beneficial owners, shall not be precluded from disclosure by Section 216(1).

The bill further proposes a proviso (can also be called a “carve-out”) through which those people who have been excepted under section 5(m)(iv) of the National Accountability Bureau Ordinance, 1999 will be excluded from the aforestated amendment.

The explanation proposed by the bill links the meaning of “high-level public officials” to the definition of politically exposed persons (“PEP”) mentioned in a rule, regulation, executive order or under any law for the time being in force.

The PEP has been defined under Regulation 2(m) of the National Savings (AML and CFT) Regulations, 2020 as “any individual who is or has been entrusted with a prominent public function in Pakistan, a foreign country, or an international organisation, and includes but is not limited to – (i) heads of states, heads of governments, ministers and deputy or assistant ministers by whatever name called; (ii) Members of Parliament or Provincial Assembly; (iii) Judges of Supreme Courts, of constitutional courts or of any judicial body the decisions of which are not subject to further appeal except in exceptional circumstances; (iv) Government employees of BPS21 or equivalent and above; (v) Ambassadors; (vi) military officers with a rank of Lieutenant General or higher and its commensurate rank in other services; (vii) directors and members of the board or equivalent function of an international organization; (viii) members of the governing bodies of political parties; and (ix) members of the board or equivalent function in corporations, departments or bodies that are owned or controlled by the state, Tola added.

The story was originally published in Business Recorder on January 02, 2022.