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ISLAMABAD: With days to go before its end, the tax amnesty scheme announced by the Pakistan Muslim League-Nawaz government has seen a surge of interest. According to multiple well-placed sources in the Federal Board of Revenue, so far Rs21 billion has already been raised under it in the form of taxes till June 21.
The tax amount created through the amnesty declaration and deposited in the banks stood at nearly Rs5bn, while the remaining tax amount of Rs16bn has been created in the FBR online system through the submission of challans.
The deadline of the scheme is June 30 which, according to the law, is non-extendable. Pressure is mounting on the government from various sides to extend the deadline.
Rs21bn tax raised thus far; according to law, June 30 deadline can’t be extended
Looking at the numbers of declarations coming in, and those in the pipeline, the sources in the FBR and finance ministry said the total amount of tax paid on assets declared under the scheme could well go as high as Rs100bn, though it was too early to properly calculate this number at this stage.
The details of tax amount created so far were shared with caretaker Finance Minister Dr Shamshad Akhtar on Thursday for approval before sharing it with the media. The minister received the figures, but directed top officials of the FBR not to disclose them to the media at this stage.
It was in this background that FBR spokesperson Dr Muhammad Iqbal at a press conference on Friday did not disclose the tax figure created officially, preferring to say only that the response thus far had been “encouraging”. He went on to claim that its success would help resolve the current account deficit and balance of payment issues. He said the number of beneficiaries of the scheme was increasing every day, and categorically stated that the FBR had no power to extend the deadline.
The scheme became effective from April 10 and expires on June 30. It allows people to voluntarily declare domestic as well as foreign assets that had till April 10 been held beyond the tax authorities’ knowledge and reach. It offers varying rates that will be charged on these assets, ranging from 2 to 5 per cent, depending on whether it is a domestic or foreign asset, the asset class, and whether or not it is being repatriated to the country or now. This is the fourth in a series of amnesty schemes announced by the PML-N government in five years, and comes at a time when many holders of black money abroad are already very concerned about the OECD tax information treaty that Pakistan has signed which will enable automatic sharing of information with many other countries. That automatic sharing is set to begin on Sept 1 of this year.
The FBR spokesperson said the response from people increased overwhelmingly after remarks from Chief Justice of Pakistan Saqib Nisar that the bureau could pursue the scheme. A Supreme Court bench was hearing the case on the matter at its Lahore registry.
A source in the finance ministry told Dawn that after green signal from the Supreme Court, Finance Minister Shamshad Akhtar held several meetings with top officials of the FBR to energise the scheme.
Several technical flaws were discovered in the scheme meant for declaration of foreign assets which needed clarification and improvement along the way. “We have addressed almost all queries and issues raised by intended people who want to declare their foreign assets,” the FBR source told Dawn. These apprehensions were removed in consultation with chartered accounts that are in direct contact with intended clients.
The FBR spokesperson said that several legal measures were already taken in the last budget to penalise those people who would not avail this scheme. He said it would be difficult for people, especially for those who did not disclose their foreign assets.
In the 1958 amnesty scheme, an amount of Rs1.12bn was recovered from undeclared assets, followed by Rs920m in 1968, Rs1.5bn in 1976, Rs10bn in 2000 and Rs3.16bn in 2008. There are several other schemes which were also offered in 1985, 1991, 1998, 2012 and 2016. However, the FBR did not disclose their revenue recovery or beneficiaries.
Published in Dawn, June 23rd, 2018
The tax amount created through the amnesty declaration and deposited in the banks stood at nearly Rs5bn, while the remaining tax amount of Rs16bn has been created in the FBR online system through the submission of challans.
The deadline of the scheme is June 30 which, according to the law, is non-extendable. Pressure is mounting on the government from various sides to extend the deadline.
Rs21bn tax raised thus far; according to law, June 30 deadline can’t be extended
Looking at the numbers of declarations coming in, and those in the pipeline, the sources in the FBR and finance ministry said the total amount of tax paid on assets declared under the scheme could well go as high as Rs100bn, though it was too early to properly calculate this number at this stage.
The details of tax amount created so far were shared with caretaker Finance Minister Dr Shamshad Akhtar on Thursday for approval before sharing it with the media. The minister received the figures, but directed top officials of the FBR not to disclose them to the media at this stage.
It was in this background that FBR spokesperson Dr Muhammad Iqbal at a press conference on Friday did not disclose the tax figure created officially, preferring to say only that the response thus far had been “encouraging”. He went on to claim that its success would help resolve the current account deficit and balance of payment issues. He said the number of beneficiaries of the scheme was increasing every day, and categorically stated that the FBR had no power to extend the deadline.
The scheme became effective from April 10 and expires on June 30. It allows people to voluntarily declare domestic as well as foreign assets that had till April 10 been held beyond the tax authorities’ knowledge and reach. It offers varying rates that will be charged on these assets, ranging from 2 to 5 per cent, depending on whether it is a domestic or foreign asset, the asset class, and whether or not it is being repatriated to the country or now. This is the fourth in a series of amnesty schemes announced by the PML-N government in five years, and comes at a time when many holders of black money abroad are already very concerned about the OECD tax information treaty that Pakistan has signed which will enable automatic sharing of information with many other countries. That automatic sharing is set to begin on Sept 1 of this year.
The FBR spokesperson said the response from people increased overwhelmingly after remarks from Chief Justice of Pakistan Saqib Nisar that the bureau could pursue the scheme. A Supreme Court bench was hearing the case on the matter at its Lahore registry.
A source in the finance ministry told Dawn that after green signal from the Supreme Court, Finance Minister Shamshad Akhtar held several meetings with top officials of the FBR to energise the scheme.
Several technical flaws were discovered in the scheme meant for declaration of foreign assets which needed clarification and improvement along the way. “We have addressed almost all queries and issues raised by intended people who want to declare their foreign assets,” the FBR source told Dawn. These apprehensions were removed in consultation with chartered accounts that are in direct contact with intended clients.
The FBR spokesperson said that several legal measures were already taken in the last budget to penalise those people who would not avail this scheme. He said it would be difficult for people, especially for those who did not disclose their foreign assets.
In the 1958 amnesty scheme, an amount of Rs1.12bn was recovered from undeclared assets, followed by Rs920m in 1968, Rs1.5bn in 1976, Rs10bn in 2000 and Rs3.16bn in 2008. There are several other schemes which were also offered in 1985, 1991, 1998, 2012 and 2016. However, the FBR did not disclose their revenue recovery or beneficiaries.
Published in Dawn, June 23rd, 2018
