Pakistan Criticizes Tax Officials Over Failure to Track UAE Golden Visa Holders

Moustafa Daly
Cairo

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Pakistan’s Federal Tax Ombudsman has issued a warning and set a deadline for local tax authorities as it ramps up efforts to tax Pakistanis with overseas assets.

Pakistan’s Federal Tax Ombudsman has issued a notice to the country’s tax authorities for failing to track Pakistanis holding UAE golden visas, which are long-term residency permits requiring investments of at least AED 500,000 (approximately US$136,000).

The ombudsman gave tax officials until July 29, 2025, to explain their inaction, which violates the Income Tax Ordinance amended in 2020 to improve oversight of outbound wealth and strengthen tax collection.

The law requires that immigration authorities share real-time travel and residency data or periodic reports with the tax department. This data would help officials identify individuals with foreign residency permits and ensure they properly declare foreign income and assets.

But the ombudsman is accusing the tax authorities, specifically the Federal Board of Revenue, of neglecting to request these reports, resulting in gaps in oversight that allow some Pakistanis to avoid declaring their assets and investments abroad, particularly in the UAE.

Pakistan does not impose citizenship-based taxation; thus, these efforts primarily target tax-resident Pakistanis with property and assets abroad.

Why the UAE is Central to Pakistan’s Tax Evasion Concerns

The UAE hosts 1.9 million Pakistanis, making it one of the largest Pakistani diasporas, comprising above 16% of the UAE’s population of 11 million. Remittances from this community to Pakistan reached US$6.7 billion in 2024 and are set to exceed US$7 billion in 2025.

The UAE launched its golden visa program in 2019, which helped transform the country into a global hotspot for wealthy investors. With low taxes and a reputation as a luxurious lifestyle haven, it has become a high-demand destination for high-net-worth individuals. In 2024, the UAE attracted more foreign millionaire residents than any other country and is projected to draw nearly 10,000 more in 2025.

Many high-net-worth Pakistanis hold golden visas, including well-known celebrities and businessmen; however, officials suspect that some do not properly declare rental income and capital gains, or pay the mandatory 2% Capital Value Tax (CVT).

Limited cooperation from the UAE adds another layer of complexity as the UAE maintains strong privacy protections for investors. Despite an existing tax treaty allowing information exchange between the two countries, the UAE has not shared detailed financial data on Pakistani residents. Many seem to use their golden visa permits, rather than Pakistani passports, to open bank accounts in the UAE. This complicates efforts to track financial activity under the Automatic Exchange of Information framework, which relies on passport identification.

Officials also believe some investors rely on informal remittance systems to transfer funds outside of Pakistan, according to local media reports. These systems bypass the formal banking network, complicating efforts to trace money flows and enforce anti-money laundering laws.