Chairman Federal Board of Revenue

LETTER FROM LETTER FROM HAJI ABDUL GHAFOOR, ADVOCATE HIGH COURT, FAISALABAD TO CHAIRMAN, FEDERAL BOARD OF REVENUE (Re: Foreign remittance -- submission of) The Chairman, Federal Board of Revenue, Islamabad. SUBJECT: FOREIGN REMITTANCE -- SUBMISSION OF:-- Respected Sir, Under the existing provision of subsection (4) (a) of section 111 of the Income Tax Ordinance, 2001, the provisions of section 111(1) of the Income Tax Ordinance, 2001 deals with the unexplained investments shall not apply to any amount of foreign exchange remitted from outside Pakistan through normal banking channel i.e. Encashed into Pak rupees by a schedule bank and a certificates from such bank is produced to that effect. From the aforesaid provisions of law it appears that the amount of remittance should be sent and received through a schedule bank and such bank shall issue a certificate to this effect. In this way, the Government of Pakistan receives the foreign exchange sent from abroad. The State Bank of Pakistan has duly authorized various companies, like western union Exchange Company and Wall Street Exchange Company etc to open their branches/franchise in the country who receives the foreign exchange from the sender residing abroad and after surrendering the foreign exchange to the State Bank of Pakistan, pay amount in Pak rupee to the receiver/beneficiary. Thus the Government of Pakistan receives the foreign exchange sent from abroad. A number of Pakistan nationals residing abroad sends the foreign exchange through aforesaid companies and such companies issue a certificate/receipt showing the name of the sender, country from which amount is being sent and foreign exchange as well as amount of Pak rupee along with the name and address of the beneficiary. The procedure of sending the foreign remittance is same in the above sources but from the plain reading of the aforesaid provisions of law it appears that the above said companies do not hold the status of the bank and as such the foreign remittance received through the above said companies does not fall within the ambit of subsection (4) (a) of section 111 of the Income Tax Ordinance, 2001. The under signed is of the view that it is a case of hardship and unjustified if the above said remittances are treated as unexplained money. In view of the above, it is requested that a clarification may kindly be issued in this regard or a suitable amendment in law may kindly be ordered to be made so that the foreign remittance received through the above said companies may be legalized. ***