KARACHI: The State Bank of Pakistan (SBP) has amended laws explaining how overseas and resident Pakistanis may declare their hidden assets, pay a nominal tax against the declaration of assets and how money can be brought back to the country.
The amendment in the procedure for repatriation of liquid assets and deposit of taxes under Foreign Assets (Declaration and Repatriation) Act 2018 has been made to facilitate those who declare their assets so that the country could receive maximum possible amount in US dollars and stabilise the depleting foreign currency reserves.
The addition and amendment has allowed these people to pay required tax – 2-5% of the value of assets – and transfer the declared liquid assets through his/her immediate family members’ bank accounts through proper banking channels.
Besides, those who declare foreign assets may also use a foreign currency account being operated in any of the banks in Pakistan to make the tax payment and/or make tax payment in US dollars through a cheque.
The SBP, however, clarified that the tax payment could not be made through exchange companies, money business services, etc.
“The tax payment can be made through banking channels either from the declarants’ own accounts or from the accounts of immediate family members ie his/her parents, children, spouse and siblings (brothers and sisters),” an SBP notification said on Thursday.
“In case of payment through the immediate family members’ accounts, the declarant…shall also send satisfactory documentary evidence to establish the relationship.”
In case, those who declare their foreign assets are using domestic foreign currency accounts to pay taxes, they are restricted to utilise the balance amount in the accounts as on March 31 or June 20, 2018 – whichever is less.
For instance, if the balance in a foreign currency account stands at $10,000 and $5,000 respectively on March 31 and June 20, 2018, tax payment to the extent of $5,000 can be made from this account, the SBP elaborated in the section of frequently asked questions.
The notification added “the declarants having bank accounts outside Pakistan but presently residing in Pakistan can also pay the tax in US dollar by depositing cheques with authorised branches of National Bank of Pakistan in Pakistan for collecting the proceeds for onward credit to the SBP account in NBP New York.
“While NBP has been advised to make special arrangements for expeditious collection of the cheque proceeds, it may take 7-10 days in collection of the proceeds,” it said.
People using this payment option should be aware of possible delays in collection of the proceeds. The SBP will issue a computerised payment receipt on realisation of funds in its account.
“Tax payment can be made within three days of generation of PSID (payment slip ID)” at the Federal Board of Revenue’s (FBR) website – e.fbr.gov.pk, it said.
Independent economists and individuals estimate that $1-4 billion will be added to the foreign currency reserves through the amnesty scheme.
Pakistan’s foreign currency reserves dropped to a critical level of $10.26 billion on June 14, 2018. With this, the country cannot even make two months of imports.