Tax authorities have sought details from the United Arab Emirates (UAE) of Pakistanis who have obtained Iqama (work permit) from the Arab country in a bid to hide their “illegal wealth”.
In a letter, the Federal Board of Revenue told the UAE authorities it was seeking details over suspicion that some people may have laundered funds to the country in the garb of Iqamas.
In the letter, the FBR’s directorate of internal taxes said information already received from the UAE was “not very substantial” as details of only 3,620 accounts were reported and “the number of material accounts with substantial balance is negligible”.
“This is not only contrary to our expectations but also insignificant in comparison with Pakistan’s other exchange partners,” the FBR wrote in the letter.
“The internal deliberations on the matter indicate that it might be due to the UAE’s domestic laws which allows foreign nationals to obtain residence/Iqama on the basis of investment beyond a certain threshold. This may be pointed out that we have absolutely no problem with the Pakistani nationals investing and doing business in the UAE legally with lawfully remitted funds,” it added.
However, the FBR wrote that it was “gravely concerned with the persons who may have siphoned off funds illegally from Pakistan, parked them in the UAE and now hiding behind Iqama-based residential status to circumvent reporting under the CRS”.
“This is of course not a desired situation for both countries, particular for Pakistan,” it added.
The FBR requested the UAE ministry to guide and assist it in the matter. “Article 26 and 27 of Pakistan-UAE DTA support formal and structured deliberations on a matter of mutual or a unilateral concern,” added the FBR in the letter sent to Younis Haji Alkhoori, under-secretary at the UAE Ministry of Finance.
