Action against foreign assets holders next month: FBR3 min read

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ISLAMABAD – The Federal Board of Revenue (FBR) has decided to take action against those who do not declare their hidden local as foreign assets after the expiry of the scheme August 1, 2018.

“Tax amnesty scheme will expire on July 31 and it depends on the next government to give further extension to the scheme or not,” said an official of the FBR in a talk with The Nation.

He further said that FBR is not in favour of granting extension to the scheme, which had already extended.

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“We will propose the new government to take action against non-taxpayers to broaden the tax base of the country,” he said.  “The government had already given a golden opportunity to declare hidden local and foreign assets by paying nominal tax”.

He informed that FBR would take the help of National Database Regulatory Authority (Nadra) to trace the tax evaders and digging out the non-filers who hide their assets and income.  The Nadra will be requested to provide details of non-taxpayers regarding banking transaction, booking of vehicles, private school fees, deal in immoveable and moveable properties and foreign tours, he added.

Similarly, he informed that they would also initiate action against those who hide their foreign assets . The FBR has recently obtained information about immovable properties owned by the Pakistanis in the United Kingdom with the assistance of Organisation for Economic Cooperation and Development (OECD) and the UK tax authorities.

Also Read: FBR Member calls for optimal use of ongoing Tax Amnesty, rules out extension

The FBR official said that the information was being analysed for taking further action. “The FBR has also details of Pakistanis who invested in real estate in United Arab Emirates (UAE). The list reportedly carries all the details of those people, including the addresses of properties, passport numbers of their owners, their names and even the ages of investors who had purchased properties there,” he said.

Pakistan would start receiving exchange of information about offshore accounts from OECD nations from September. Currently, there are 104 signatories of the Convention on Mutual Administrative Assistance in Tax Matters.

Reportedly, a total of 56 countries have shown their willingness and officially notified necessary requirement for automatic exchange of information with Pakistan.

In the first phase, which will start from September, Pakistan will exchange information with 35 countries, while in September 2019 another 20 countries will be added to the list of sharing of information.

It is worth mentioning here that previous PML-N government had given an opportunity to whiten the black money and assets by paying nominal tax. The government in April this year had announced two tax amnesty schemes, namely, Foreign Assets (Declaration and Repatriation) Ordinance, 2018 for undisclosed foreign assets and Voluntary Declaration of Domestic Assets Ordinance, 2018 for undisclosed income and domestic assets. Amnesty scheme for foreign assets applies to both liquid and immovable assets such as bank accounts, shares and mortgaged properties.

Tax rates range from 2percent to 5 percent, depending on the type of asset. Special tax rate of 2 percent is applicable to liquid assets which are repatriated into Pakistan. The amnesty scheme for domestic assets covers all types of assets and income, with tax rates of 2 percent and 5 percent.

The original closing date for filing declarations under the amnesty scheme was June 30, 2018. However, it was extended till July 31, 2018 later.

Also Read: FBR to start automatic sharing of data with OECD from September

During the tax amnesty scheme, so far, 55,225 declarations have been filed in which declared value of foreign assets is around Rs577 billion and that of domestic assets is around Rs1,192 billion till June 2018.

Declarants have paid around Rs97 billion out of which around Rs 36 billion have been collected on foreign assets and Rs 61 billion on domestic assets.

In addition, $40 million have been repatriated. This response to the amnesty scheme has been unprecedented.

(This news/article originally appeared in The Nation on July 24th, 2018)

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