KARACHI: The Federal Board of Revenue (FBR) is eyeing Rs300 billion in revenue under the proposed tax amnesty scheme as it has proposed the government to keep concessional tax rates on the assets to be declared higher, sources said on Wednesday.
The government is mulling another tax amnesty scheme for foreign and domestic undeclared assets on the same pattern, which was introduced by the previous government last year, the sources in the FBR said. The sources said the FBR, however, proposed the government relatively higher tax rates on assets to be declared under the new tax amnesty as compared to the rates offered during the last scheme.
The previous tax amnesty that remained applicable during April-July, 2018 was introduced for declaration of assets through two laws: Foreign Assets (Declaration and Repatriation) Act, 2018 and Voluntary Declaration of Domestic Assets Act, 2018. The concessional tax rates offered on the scheme ranged between two to five percent depending on the nature of concealed assets.
The FBR sources said it was agreed at the finance ministry level that the new amnesty would be introduced at the same pattern of the past scheme. The government managed to raise Rs120 to 125 billion in tax revenue through the last scheme.
“The tax authorities have now estimated around Rs250-300 billion in revenue from the new scheme,” a source said.
The sources said the FBR believed that a large number of people would be attracted to the new tax amnesty because of the actions taken by the tax authorities during the past couple of months. But, the revenue body wants the tax amnesty only for the people who are not facing any legal proceedings.
“Implementation of laws related to offshore transactions, Benami properties and fake bank accounts created deterrence against tax evasion,” a FBR official said. The FBR for the first time made around nine arrests during its ongoing campaign against tax evaders since January 2019.
The official said the tax authorities effectively worked on the data received by Pakistani authorities related to properties in the UK. Several big names were identified, as they had not declared their sources of income for having ownership of the UK properties. Discovery of properties owned by Pakistanis in UAE also exposed numerous people as the authority unearthed black money, the official added. The FBR is further working on the data under the exchange of tax information agreement with the Organization for Economic Cooperation and Development’s member countries.
Abdul Qadir Memon, president of Pakistan Tax Bar Association said the new tax amnesty is expected to be finalised during the current week. “The government is likely to launch it between April 15-20,” Memon, who participated in designing the new scheme, said.
Memon said the tax amnesty would play a major role in economic growth considering the ongoing fiscal situation.
(This news/article originally appeared in The News on April 4th, 2019)