Pakistan: Peer Review Report on Exchange of Information and Transparency


On 8 November 2023 the Global Forum published the second-round peer review report assessing Pakistan’s practical implementation of the standard on transparency and exchange of information on request (EOIR). The latest peer review assessment concludes that Pakistan is “Largely Compliant” with the standard on EOIR.

The report notes that Pakistan has strengthened its implementation of the standard and has improved its handling of information requests since the first-round review was carried out. In the intervening period Pakistan also significantly expanded its network of relationships for the exchange of information. In 2017 Pakistan became a party to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

The domestic law has been amended to ensure that the disclosure of exchanged information in Pakistan remains within the restrictions required by the minimum standard. Also, any possible ambiguity in the domestic law or any possible contradiction of the treaty confidentiality requirements has been removed by amending the domestic law.

The EOI unit has made some improvements in the time taken for processing information requests when responses are provided within one year. This improvement is however less effective because a larger number of requests are now requiring more than one year to be processed.

In 2020 Pakistan enacted requirements for legal entities and trusts to maintain beneficial ownership information, however the peer review report notes that this will not result in the compilation of beneficial ownership information in all situations required by the standard. The report notes that the enforcement of ongoing compliance with these obligations should be improved, in particular in relation to annual filing requirements, for which the availability of legal and beneficial ownership information is critical.

The availability of information on the identity of partners in a general partnership (association of persons) depends on the domestic tax law, however those laws do not require the filing of the relevant information in all cases where the standard requires the information to be available. The peer review report also considers that more actions are needed to resolve the status of inactive companies.

Pakistan’s legal framework ensures the availability of banking information, and also mostly ensures the availability of accounting information through the tax framework, although the coverage of partnerships needs to be improved further.

A total of 51 EOI requests were received in the period from 1 July 2019 to 30 June 2022, Pakistan responded to 39% of the requests within 180 days and to 71% of the requests within one year. The report noted that most of the remaining EOI requests were pending, with partial responses providing information in stages. Status updates were generally not provided to treaty partners within 90 days and provision of status updates is currently not part of the standard procedures. However, the report concludes that Pakistan is generally effective in the exchange of information but with further room for improvement in the timeliness of responses to information requests.

 



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