Nothing heard from Ishaq Dar since last announcement in 2014. Now in last year of Election, another deception. Forget about Swiss recovery.
By Danish Hussain
Pakistan will soon formally sign a new treaty with Switzerland to pave way for the exchange of information on the undeclared wealth stashed in Swiss banks.
Finance Minister Ishaq Dar informed the National Assembly on Wednesday that the Avoidance of Double Taxation treaty will be signed on March 21 as a formal invitation from Switzerland has been received in Islamabad.
“It took Pakistan almost three years to negotiate and upgrade the existing treaty. The new treaty will enable the country to get information about undeclared money stashed in Swiss banks by Pakistanis,” Dar said in a policy statement.
He said Switzerland had earlier attached four demands as prerequisites for signing this treaty. Pakistan had first informally accepted these demands, but later termed them unacceptable.
The demands were related to granting the Most Favoured Nation (MFN) status to Switzerland in respect of lowering tax rates on interest, royalty, shipping, and reduction in the tax exemption limit — from 18,000 Swiss francs to 14,500 francs — on Pakistani nationals, including students living in Switzerland.
“Pakistan had informally agreed to extend these favours but later we decided to reopen negotiations and to persuade Swiss authorities to ratify the treaty with Pakistan without attaching any preconditions,” he said.
Eventually, on March 2 Bern formally conveyed to Islamabad that it was ready to sign the treaty unconditionally. “Pakistan has confirmed the March 21 signing date. Now, Pakistan is going to sign the exchange of information treaty which is globally acceptable,” he added.
The minister informed the house about the reasons which forced Switzerland to sign the treaty unconditionally. He said as a parallel option, in January 2014 Pakistan initiated the process of becoming a member of the Multilateral Convention on Tax Matters with the Organisation for Economic Cooperation and Development (OECD).
After fulfilling all the requirements Pakistan was granted a membership of the OECD in September 2016. Pakistan is 104th member of the OECD and its membership will operationalise next year.
“The OECD is a relatively bigger forum for auto spontaneous exchange of information among member countries,” Dar said, adding that when Pakistan became the OECD member, the Swiss government reconsidered its conditions and announced to sign this new treaty with Pakistan.
“Under the new treaty it will become impossible for Pakistanis to keep tax evaded money in these countries,” he said.