Pakistan, Switzerland signed accord on exchange of bank accounts

Finance Minister Ishaq Dar in a policy statement in the National Assembly said that Pakistan is going to sign an agreement with Switzerland on exchange of information regarding bank accounts on March 21st.

He said that the conditions presented by Pakistan were accepted by the Swiss authorities as Pakistan would not lessen the tax rates and it would not give Switzerland the status of Most Favoured Nation (MFN).

"The Swiss government offered to sign such an agreement with Pakistan in the third quarter of the current month that will enable us to exchange information on tax-evaded money," Dar said in a policy statement.

The finance minister said that several media reports have surfaced over the years alleging that Pakistanis have evaded taxes – a hefty amount of over $180-200 billion – and stored the money in Swiss banks.

The finance minister said that the Swiss government had initially proposed "strict conditions" to be included in the agreement, such as reducing tax rates, granting it most-favoured nation (MFN) status, and reducing students' bank account limit to $14,500 from the existing $18,000.

Overseas tax havens such as Switzerland dominated the news in Pakistan in the 1990s. The most dramatic and best publicised of these cases involved the still unclaimed jewellery set, valued at an estimated 117,000 British pounds, placed in a Swiss bank locker and alleged to belong to the late Benazir Bhutto. 

The Finance Minister said Pakistan has already signed the Multilateral Convention on Tax Matters with Organization for Economic Cooperation and Development (OECD) on September 14, 2016 which is going to be operationalized next year.

The minister said meanwhile Pakistan became the 104th member of the Organisation for Economic Cooperation Development (OECD) meant for sharing information on the tax-evaded money. Over the period, many media reports said Pakistanis had $180 billion to $200 billion tax-evaded money in Swiss banks, which called for a treaty of information exchange.

The exchange of information process will be starting from January 1, 2018. After this agreement, Pakistan would be eligible to automatically get information about the tax-evaded money.