ISLAMABAD - Despite strong opposition from the IMF, the PPP-led coalition government is all set to table the bills of much controversial tax amnesty schemes in the ongoing session of the National Assembly that would whiten the black money and assets at home and abroad within three months against a nominal one-time charge.
Reliable sources said the government was likely to table the bills of the tax amnesty schemes, Investment Tax Scheme (ITS 2012) and Tax Registration Enforcement Initiative 2012 (TREI 2012), in the ongoing session of the National Assembly that started on Monday. It has planned to generate Rs 100 billion to Rs 120 billion through these amnesty schemes by whitening the black money and assets at home and abroad within three months against a nominal one-time charge. The government is is introducing the amnesty schemes to generate additional revenue in a bid to meet the annual revenue collection target. The tax collection shortfall stood at Rs 88 billion in the first five months (July-November) of the ongoing financial year 2012-2013. The FBR has collected Rs 691 billion during the period under review against the target of Rs 779 billion.
The sources further said the National Assembly would refer these money bills to the Senate for recommendations. The Senate would forward its recommendations within 15 days to the National Assembly. The tax amnesty schemes were approved by the federal cabinet last month. The schemes are likely to be effective during the third quarter (January-March) of the ongoing financial year 2012-2013.
The International Monetary Fund (IMF) has strongly opposed the proposed tax amnesty scheme of the government and, proposing action against 3.8 million tax evaders. However, the economic experts in the government team believe that tax net of the country would be expanded by introducing the tax amnesty schemes.
According to the proposed schemes, the government has fixed a limit up to Rs 5 million for both incomes and assets that can be whitened through these schemes. The government will not ask the source of income and previous tax evaders will be considered to have a clean slate as long as they are honest taxpayers in the future. The FBR has identified 3.1 million people who are evading tax of whom at least 1.3 million are expected to be brought into the tax net.
According to the reports, for up to Rs 5 million, the FBR will allow clearance of cash by paying Rs 40,000 in the first month, Rs 50,000 in the second month and Rs 70,000 in the third month. Any amount above Rs 5 million will be cleared by paying one per cent of the total amount in the first month, 1.25 per cent in the second month and 1.75 per cent in the third month.