The government eventually implemented the long-awaited Benami law in an attempt to document the economy.
Tax officials got the chance to seize properties, vehicles, and bank accounts registered with fictitious people. From now on, all movable and immovable property registered with fictitious entities will be confiscated to avoid taxation.
The law will eventually come into effect after a delay of more than two years. In particular, the term “Benami” means assets or property in the name of a person who is not the beneficiary of that account.
Most of the time, however, the term “benami” is associated with the concealment of ownership of assets acquired by illegal sources, avoiding the payment of state funds, taxes and scams.
To reduce this practice, the government has introduced a new policy. Now there are huge cash rewards for the whistleblowers of the Benami assets, both mobile and immovable.
The legislation came into force through a law of Parliament in January 2017, the Benami Transactions Act (Prohibition), 2017. However, the legislation went behind the scenes amid a delay in finalizing the rules.
In a recent development, the Federal Revenue Service (FBR) issued a notice setting out the rules of the Benami Law.
According to Benami Act :-
According to the law, three approval authorities will be established in the first phase in three cities, Lahore, Karachi and Islamabad. The jurisdiction of these authorities will be announced within a few days.
In addition, the commissioner of the income tax will play the role of the government. The designated officers will investigate the available data to indicate the naming assets. The offices will receive data on property transactions and mapping vacancies in the first phase.
The tax officer will first issue a notice that prevents the transfer, transfer or disposal of Benami assets over a 90 day period. During this period, the tax officer will investigate the case and form an initial investigation report (FIR), which will then be sent to the awarding authority.