The Tax Amnesty Scheme 2018 is finally producing the desired results. The amount which has gone up from Rs350 million to Rs21 billion in a matter of days in the month of June shows the push from the authorities to convince residents to join the tax net. A major contributor to this surge in the declaration is the support granted by the Supreme Court of Pakistan (SC) after careful scrutiny of the clauses of the scheme and facilitating the institutions to promote it and somewhat guarantee its adoption by the bureau. Pakistan’s economic losses are increasing by the day - a huge blow has been faced by the foreign exchange reserves and the exports of the country. A scheme such as this, and judging by the response of the people, is bound to help the state with the balance of payments.

One aspect which is creating problems is that the scheme went live in April and did not see many contenders until mid-June after the SC’s approval. Many citizens are now demanding an extension to the June 30 deadline. This will help broaden the tax base, especially if a targeted awareness campaign is initiated to invite people to avail this one time opportunity. If granting more time to the scheme means an increase in the tax net, then this is a policy worth consideration because Pakistan at this point needs funds to sustain its economy.

Pakistan is expected to join the Organisation for Economic Co-operation and Development (OECD) tax treaty in the near future. This involves avoiding double taxation of the citizens of the member countries but in order to benefit from these leverages, the person must in the tax net of the home country. This benefit itself is bound to attract several residents with undeclared wealth to utilise the amnesty scheme.

While the government must be commended for its efforts, it must also be brought to attention that the reason why there was uncertainty regarding the scheme was that it was drafted in the prime minister secretariat without the involvement of the relevant institutions like the Federal Board of Revenue (FBR). Had that been done earlier, this would not have required an extension and all institutions would have worked together to create the awareness which is pertinently needed at the time.