Taxmen can seize assets held in other than owner's names.

Byline: Shahbaz Rana

ISLAMABAD -- The federal government on Monday notified the Benami Transactions Prohibition Rules that would finally make the law operational after a gap of two years, empowering taxmen to confiscate assets held in other than owners' names.

The rules also offer rewards, as high as 5% of the value of confiscated properties and assets, to whistleblowers. The rules have immediately come into force, according to a notification issued by the Federal Board of Revenue (FBR). It took the FBR more than two years to notify nine-page rules and the matter was finally resolved after the push came from none other than Prime Minister Imran Khan.

With notification of rules, the Benami Transactions Prohibition Act of 2017 has come into force. The law authorises the federal tax authorities to confiscate all those properties that have been held in others' name. It is generally presumed that such assets are either created through black or tax evaded money.

The taxmen will have the powers to confiscate both movable and immovable assets. The parliament approved the law in January 2017 and the president gave his stamp of approval the next month; but for over two years, bureaucrats and politicians delayed application of the law on flimsy grounds.

The rules have also specified the number of rewards for whistleblowers. The whistleblower is entitled to 5% of the benami property if its value is up to Rs2 million. In case the property's value is more than Rs2 million, the whistleblower will get Rs100,000 plus 4% of the value of the property.

On a property of over Rs5 million, the whistleblower will be given an award of Rs220,000 plus 3% of the value of the property. Anybody found guilty of keeping benami assets will face confiscation of property, rigorous imprisonment of up to seven years and a fine equal to 25% of fair market value of the property.

The price of benami property will be determined at fair market value, which is defined in the Income Tax Ordinance of 2001. Its section 68 says: 'The fair market value of any property or rent, asset, service, benefit or perquisite at a particular time shall be the price which the property or rent, asset, service, benefit or perquisite would ordinarily fetch on sale or supply in the open market at that time'.

There has been a tendency among the politicians, bureaucrats, military officials...