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FBR chairman Shabbar Zaidi’s statement that the Dubai Land Department will provide the details of properties owned by Pakistani citizens will likely cause some unease among those who have parked their wealth in the glitzy Emirati city.
Zaidi held productive meetings with UAE authorities on the exchange of information regarding property owners and the misuse of work permits. He claims that around $6 billion has been siphoned out of the country since the last two decades and this flight of capital has been described as a serious matter.
The tax body has stated that it has received data of Pakistani nationals who obtained residence by investments in the UAE to hide their ill-gotten wealth. This data will be scrutinised for identification and notices will be served for tax collection. However, concerns are being raised that that private data given to FBR could be comprised or used to harass Pakistani expats. The FBR maintains that it will pursue cases only where tax evasion is detected.
UAE allows foreign nationals to obtain work permits on the basis of investment. Pakistan has signed avoidance of double taxation agreements with UAE. Many Pakistanis have settled in the Middle East sending remittances back home. These are often considered as the lifeline of Pakistan’s economy. These expats should not be hounded by authorities just to build up their tax revenues.
Many apprehensions are being raised as to why Dubai is now sharing such information.There is more willingness displayed by Dubai as it shakes off the image as a tax haven and money laundering hub. A major success came last week when the EU removed the financial centre from the list of tax havens after it was shown to have made satisfactory changes in its tax laws.
Pakistan has received a cold response from many smaller countries to provide information regarding off-shore company holdings. The cases against over 400 individuals named in the Panama Papers are still pending further investigation.
There is considerable talk about funds stashed by Pakistani elite in the Emirates. The rich have basked in glory in one of the world’s most luxurious capitals. In 2018, Pakistanis bought properties worth 2.8 billion dirhams in Dubai’s real estate market and now this can of worms is about to be opened. The rich beware.
