FBR to impose penalties on banks for hiding account holder information
The Federal Board of Revenue (FBR) has taken a stride by
deciding to levy penalties on banks for their failure to furnish account holder
details, as disclosed by official sources.
According to these sources, banks are legally mandated to
provide account holder information and transaction records to tax authorities.
This data plays a pivotal role in identifying new taxpayers and advancing the
formal documentation of the economy.
Disclosure
of assets mandatory for federal government servants to open bank accounts
In order to ensure compliance by financial institutions, the FBR
has introduced financial penalties for banks that fall short of meeting these
reporting obligations.
As per the sources, if a reporting financial institution fails
to adhere to the provisions outlined in section 165B of the Income Tax
Ordinance, 2001, or the Common Reporting Standard Rules detailed in Chapter
XIIA of the Income Tax Rules, 2002, they will be liable to pay a penalty of Rs.
10,000 for each instance of non-compliance. Additionally, they will incur an
additional penalty of Rs. 10,000 for each subsequent month until the lapse is
rectified.
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Similarly, financial institutions that submit incomplete or
inaccurate reports in accordance with the provisions of section 165B of the
Ordinance or the Common Reporting Standard Rules in Chapter XIIA of the Income
Tax Rules, 2002, will face the same penalties.
Furthermore, financial institutions failing to obtain valid
self-certification for new accounts or providing false self-certification by
Reportable Jurisdiction Persons under the Common Reporting Standard Rules will
also be subject to these penalties.
These measures underscore the government's steadfast commitment
to enhancing transparency and accountability within the financial sector. The
penalties are designed to ensure that banks fulfill their obligations
concerning the provision of account holder information, a critical step towards
effective tax administration and the promotion of financial integrity.
Source: Revenue.pk