SAARC Members Close To Multilateral Tax Treaty Ratification

by Mary Swire, for LawAndTax-News.com, Hong Kong

20 September 2005

The Limited Multilateral Tax Treaty (LMTT) between the member states of the South Asian Association for Regional Cooperation (SAARC) is close to being ratified by national governments, according to a report in Pakistan's national media.

An official told the Daily Times that tax experts from the SAARC member countries have updated the 22 provisions of the LMTT, the first of its kind in the region, and these are now ready to be ratified by the national legislatures. The treaty is expected to take effect immediately after receiving formal approval of the SAARC member nations during its upcoming summit.

One of the primary goals of the joint tax initiative, which was agreed by representatives of the national governments in Islamabad in December 2004, is the sharing of tax information within SAARC in an attempt to combat fiscal evasion. The SAARC membership includes Bangladesh, Bhutan, India, The Maldives, Nepal, Pakistan and Sri Lanka.

The agreement also includes double taxation avoidance provisions which give tax exemption to certain groups, including students, teachers, researchers, consultants, technicians and scholars, for a period of two years on a portion of their income.

Established in the early 1980s, the principal objective of SAARC is the acceleration of the process of economic and social development in member states, through collective action in agreed areas of cooperation.

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