MULTAN - Federal Board of Revenue (FBR) Member Faheemul Haq has disclosed that the offshore and domestic tax amnesty schemes generated ‘unprecedented’ response, as over 55,000 declarations were filed to whiten Rs1.8 trillion hidden assets.
He was addressing a Seminar on "Tax Amnesty Scheme 2018” chaired by Malik Asrar Ahmed Awan, President of Multan Chamber of Commerce & Industry (MCCI) at the chamber on Thursday. He added that the tax amnesty scheme, contrary to the expectations, has so far received better response than the offshore tax amnesty scheme. The government announced the scheme with effect from April 10, primarily to offer last opportunity to the Pakistanis, facing increasing problems due to tightening of tax laws by the Organisation for Economic Cooperation and Development (OECD).
The domestic amnesty scheme had been included at the later stage of planning due to initial opposition by the Federal Board of Revenue (FBR).He made it clear that the scheme was not introduced for the benefit of a particular group or class. Everyone can avail this opportunity, he said. “So far, 55,225 declarations have been filed in which declared value of foreign assets is around Rs577 billion ($4.8 billion) and that of domestic assets is around Rs1.192 trillion,” he said. The total value of the hidden assets declared under both the schemes was Rs1.8 trillion.
He pointed out that Pakistan has also become a signatory to the OECD Multilateral Convention which will provide access to information about offshore financial accounts of Pakistani residents from September 2018. He said that it would enhance the capacity of the FBR due to access to offshore financial accounts of Pakistani residents held in the signatory countries. Necessary amendments have also been made in the Protection of Economic Reform (PERA) Act, 1992, to regulate foreign exchange movements and bring it in line with Income Tax Ordinance, 2001, it said.
Moreover, amendments have been made in the Income Tax Ordinance, 2001, whereby the FBR may inquire about the source of foreign remittance above Rs10 million and limitation of five years to probe foreign assets and income has been removed. Faheemul Haq said that the amnesty scheme for foreign assets applies to both liquid and immovable assets such as bank accounts, shares and mortgaged properties. Tax rates range from 2% to 5%, depending on the type of asset, he said.
Special tax rate of 2% is applicable to liquid assets which are repatriated to Pakistan. The amnesty scheme for domestic assets covers all types of assets and income, with tax rates of 2% and 5%. He also reiterated that the declarants were protected against any harassment and there was complete confidentiality of declarants’ information.
Moreover, such information cannot be used as evidence against declarants under any other law, he added. Chief Commissioner inland revenue Abid Raza Bodla said that the scheme was beneficial for all Pakistanis having undeclared or hidden assets in Pakistan or abroad.
President of Multan Chamber Malik Asrar Ahmed Awan stressed the need for restoration of confidence of general public and the declarants must be protected against any harassment and there should be complete confidentiality of declarants’ information.