ISLAMABAD - Prime Minister Shehbaz Sharif would decide the fate of tax amnesty scheme within this week as the International Monetary Fund (IMF) has continuously expressed concerns over the scheme.
Prime Minister has sought detailed briefing from the Federal Board of Revenue (FBR) on the recently announced tax amnesty scheme for the industrialists by the previous government. Apart from the tax amnesty scheme, the FBR would also brief the premier on other issues including tax collection target, broadening of tax base of the country, and reforms in the organisation and tax system, an official of the FBR informed The Nation on Monday. He further said that Prime Minister had met with chairman FBR last week. “It is premature to say whether tax amnesty scheme will continue or not, as Prime Minister will make a decision in this regard,” the official said and added that we would follow the instructions of the prime minister on the industrial package.
Previous government of PTI in early March 2022 had given nod to promulgate an ordinance to offer a third tax amnesty scheme. The government had offered a 5% across-the-board tax rate and immunity to investors from the investigation about sources of investment. An investor will establish a new industrial unit through the creation of a new company to avail the tax amnesty scheme. Similarly, existing units can also avail the facility for balancing and modernisation. The cut-off date for availing of the amnesty scheme will be December 2022 with the condition of starting the commercial production in the new unit by June 2024, according to the decision. Meanwhile, the government has decided that those companies returning a net loss in the last three years will be eligible to be acquired by healthy profit-making companies, which will be incentivised to adjust the sick company’s tax losses for the next three years.
IMF has continuously expressed concerns over scheme
However, the IMF had expressed serious concerns over the tax amnesty scheme, which was one of the main reasons behind stalling loan programme with the previous government. Talks between Pakistan and IMF remained inconclusive. Talks between Pakistan and IMF for the seventh review under the extended fund facility had started virtually on March 4. The talks were expected to continue for around 10 days. However, the discussions have remained inconclusive. The IMF had expressed serious concerns over the Prime Minister’s relief package by reducing oil and electricity prices and tax amnesty scheme for the industrialists. Meanwhile, talks between IMF and newly elected government had started yesterday (Monday) in Washington. Pakistani delegation comprising Secretary Hamed Yaqoob Shaikh and State Bank of Pakistan (SBP) Governor Dr Reza Baqir would meet IMF representatives. Miftah Ismail, who is likely to become Adviser to Prime Minister on Finance and Revenue, might also attend the talks.
Prime Minister has sought detailed briefing from the Federal Board of Revenue (FBR) on the recently announced tax amnesty scheme for the industrialists by the previous government. Apart from the tax amnesty scheme, the FBR would also brief the premier on other issues including tax collection target, broadening of tax base of the country, and reforms in the organisation and tax system, an official of the FBR informed The Nation on Monday. He further said that Prime Minister had met with chairman FBR last week. “It is premature to say whether tax amnesty scheme will continue or not, as Prime Minister will make a decision in this regard,” the official said and added that we would follow the instructions of the prime minister on the industrial package.
Previous government of PTI in early March 2022 had given nod to promulgate an ordinance to offer a third tax amnesty scheme. The government had offered a 5% across-the-board tax rate and immunity to investors from the investigation about sources of investment. An investor will establish a new industrial unit through the creation of a new company to avail the tax amnesty scheme. Similarly, existing units can also avail the facility for balancing and modernisation. The cut-off date for availing of the amnesty scheme will be December 2022 with the condition of starting the commercial production in the new unit by June 2024, according to the decision. Meanwhile, the government has decided that those companies returning a net loss in the last three years will be eligible to be acquired by healthy profit-making companies, which will be incentivised to adjust the sick company’s tax losses for the next three years.
IMF has continuously expressed concerns over scheme
However, the IMF had expressed serious concerns over the tax amnesty scheme, which was one of the main reasons behind stalling loan programme with the previous government. Talks between Pakistan and IMF remained inconclusive. Talks between Pakistan and IMF for the seventh review under the extended fund facility had started virtually on March 4. The talks were expected to continue for around 10 days. However, the discussions have remained inconclusive. The IMF had expressed serious concerns over the Prime Minister’s relief package by reducing oil and electricity prices and tax amnesty scheme for the industrialists. Meanwhile, talks between IMF and newly elected government had started yesterday (Monday) in Washington. Pakistani delegation comprising Secretary Hamed Yaqoob Shaikh and State Bank of Pakistan (SBP) Governor Dr Reza Baqir would meet IMF representatives. Miftah Ismail, who is likely to become Adviser to Prime Minister on Finance and Revenue, might also attend the talks.
