ISLAMABAD: The Senate`s standing committee on finance accused the Federal Board of Revenue (FBR) on Thursday of harassing taxpayers.

`I was ready to `give tea and water (a reference to a small amount paid as bribe)` to FBR officials but they demanded the huge amount of Rs7.5 million to rectify the incorrect tax imposed on me,` Senator Ilyas Bilour told a committee meeting.

`The case was related to the tax relief given by the previous government to industries in Khyber Pakhtunkhwa. Finally, I approached the high court and got relief,` Mr Bilour said.

Senator Saud Majeed said the FBR had declared him a tax defaulter despite repeated attempts to convince tax officials that he was not a defaulter.

`So I went to the FBR chairman and told him that I am a Senator... I asked him if anybody could be declared a defaulter under the given conditions.

The chairman said the officials had taken a wrong decision because they had become confused due to their workload.

The two senators recalled their personal experiences when the committee was discussing amendments to the Anti-Money Laundering (AML) Act 2010.

The amendments were introduced by the government to describe fiscal offences as crimes related to money laundering.

Members of the committee objected to the amendments and said that money laundering meant attempts to whiten ill-gotten money whereas tax evasion was already a crime under the law.

They raised several questions over bringing tax evasion under the purview of the AML Act.

The committee`s chairman, Salim Mandviwala, said the amendments did not clearly specify fiscal offences and, therefore, it could lead to more harassment at the hands of the FBR and even the FederalInvestigation Agency (FIA).

An official of the finance ministry said the amendments had been introduced to reflect Pakistan`s commitment to strengthening the existing anti-money laundering regime.

`The amendments are meant to meet the international standards as prescribed by the Financial Action Task Force,` said Muneeb Zia, an adviser to the ministry.

He said the AML regime should not be taken as a tooltorecovertaxes but as a law aimed at catching criminals.

His statement drew harsh reactions from the committee members.

`There is a need to inform us about the directives or demands of the international agencies, including the International Monetary Fund, Senator Fateh Mohammad Mohammadhasni said.

Senator Bilour said that Pakistan should not be `too obedient` to international agencies as the past experience showed that the practice had not brought any good to the nation.

However, the committee decided to discuss inclusion of the provision of tax fraud in the AML Act.

Discussing another agenda item, the committee remained clueless about whereabouts of the original documents relating to privatisation of the Muslim Commercial Bank.

An official of the National Accountability Bureau (NAB) said that neither the bureau nor the State Bank possessed the papers.

He said the finance ministry must be having the documents but officials of the ministry denied his claim, leaving the committee members groping in the dark.

Since Senator Saeed Ghani, the most well-informed member of the committee on the issue, and the relevant director general of NAB have gone to Saudi Arabia to perform Haj, the committee decided to discuss the issue at the next meeting in Oct in the presence of the chairman and the DG of NAB, the governor of the State Bank and the finance secretary.