Government to prod tax amnesty scheme
Finance ministry seeks names of 5,000 beneficiaries who had disclosed their assets of Rs1,800b under said scheme
The Pakistan Tehreek-i-Insaf (PTI) government has decided to prod the tax amnesty scheme, a brainchild of their predecessors, the Pakistan Muslim League-Nawaz (PML-N).
The government’s first course of action is to identify and investigate the beneficiaries of the said scheme, supposed to widen the tax net and bring an increase in revenue.
Sources at the finance ministry requesting anonymity said that a detailed list of the 5,000 overseas Pakistanis who had availed the scheme had been sought complete with their names and properties.
After the list is completed, according to sources, another list identifying tax evaders in Pakistan would be drawn up.
The Federal Board of Revenue (FBR) has initiated the preparation of the list.
The amnesty scheme had attracted nearly 5,000 expats, who had utilised the scheme to allegedly whiten properties worth a cumulative Rs1,800 billion in and outside Pakistan.
A further course of action will be decided on by the government after a complete report on these beneficiaries has been filed.
The tax amnesty scheme was part of the previous government’s five-point agenda for widening the tax net and including non-filers in the tax stream.
According to the scheme, people with undeclared income earned before June 30, 2017 on assets within the country were able to bring them in the tax net by simply paying a five per cent penalty.
Then-premier Shahid Khaqan Abbasi had promulgated this scheme, saying that the people who held undocumented assets outside the country would also be able to declare them through the amnesty scheme.
Foreign exchange could be brought back to the country by paying a 2 per cent penalty.
Fixed assets would incur a 3 per cent penalty, to be evaluated at the market value of the asset, which cannot be less than the cost of its acquisition.
Foreign liquid assets like cash, securities and bonds held abroad and in local dollar accounts were to be declared with a 5 per cent penalty.
Dollar account holders in Pakistan who had purchased dollars with undeclared funds could also regularise them on a 2 per cent payment.
Further, all remittances less than $100,000 per year per person would continue without any questions from any agency about the source of funds and enjoy tax exemption.
All remittances greater than that amount would enjoy tax exemption but were subject to scrutiny by the FBR.
Furthermore, any new foreign exchange accounts can only be opened by tax filers.
“People who take part in the amnesty scheme will be given a one-time exemption from accountability and other laws,” the then prime minister had explained.
However, he had stressed that politically exposed persons and their families would not be able to avail the amnesty scheme.