Secrecy provision: Confidentiality linked to tax amnesty defended
PM's aide Haroon Akhtar says OECD also seeks protection of taxpayer record
The special assistant said Pakistan has responded to the Financial Action Task Force (FATF) letter in which it has raised concerns about the negative impacts of the scheme on the global drive against money laundering. PHOTO: EXPRESS/FILE
ISLAMABAD:
The decision to keep information of individuals who avail offshore tax amnesty scheme confidential is in line with Organisation for Economic Cooperation and Development's (OECD) standards that advocate stricter protection of taxpayer record, said an aide of the prime minister on Wednesday.
"It is wrong to say that the prime minister's economic reforms package particularly the offshore tax amnesty scheme is against the OECD guidelines," said Special Assistant to PM on Revenue Haroon Akhtar Khan, while talking to the media. "The OECD also seeks protection of the taxpayer record."
According to the Foreign Assets Declaration Ordinance, the particulars of any person making a declaration, or any information received in any declaration, shall be confidential notwithstanding any law for the time being in force.
Roadblock: ‘Confidentiality aspect of tax amnesty goes against Constitution’
The amnesty has taken effect from Tuesday and will end on June 30. The government has offered people to bring back their offshore assets by paying only 2% tax and declare them at 5% rate if the assets are held abroad. Domestic assets can be declared at 5% but in case of foreign currency accounts the rate will be 2%.
The Article 19A of the Constitution provides right to information to every citizen, therefore, the constitutionality of a confidentiality clause in the Ordinance may be challenged, noted Tola Associates -the corporate and tax advisory firm in its commentary.
It is the fourth scheme that the Pakistan Muslim League-Nawaz (PML-N) government has offered during its current tenure. The previous three schemes had miserably failed. Akhtar said if this scheme also failed, this would be the result of the baseless propaganda and political bickering.
The Pakistan Tehreek-e-Insaf (PTI) has furiously opposed the package that is aimed at allowing people to whiten their black assets. The Pakistan Peoples Party (PPP) has given a mixed response, although the Senate former chairman Raza Rabbani announced to oppose the scheme in the Senate.
"Opposing the amnesty scheme is not in the interest of the country, as the scheme can fetch $5 billion to $10 billion that can ease out Pakistan's external account pressure," Akthar said. He insisted that there is no other way to bring back hidden offshore assets and other countries also offer amnesty schemes.
He said success of the scheme can end Pakistan's reliance on short-term commercial borrowings to boost the foreign currency reserves. "There is no mala fide in giving the tax amnesty scheme," he added.
To a question why the Federal Board of Revenue's (FBR) bureaucracy was against the package, Akhtar claimed that the FBR was not against the scheme. But he did not have an answer to the FBR Chairman Tariq Pasha's absence from the scene.
The special assistant said Pakistan has responded to the Financial Action Task Force (FATF) letter in which it has raised concerns about the negative impacts of the scheme on the global drive against money laundering.
Senator Akhtar said the government has legal and constitutional right to introduce any policy as long as it is in the power. "If the next government has any problems, it can reverse these measures," he said.
He said the government has also made it easy for the people to come in the tax net by drastically cutting down the income tax rate. "The effective income tax rate for people earning between Rs2.4 million to Rs4.8 million will be 6.5% against the new downward revised rate of 10%. People earning up to Rs1.2 million annually will be exempted from paying taxes from July," he said.
Akthar also inaugurated Restaurant Invoice Management System (RIMS), a technological based solution that enables monitoring of sales on real time basis thus reducing the human interface and bringing transparency in the tax collection process. The prime objective of RIMS is to facilitate the taxpayers by relying on modern techniques to tap the difference between current and potential collection.
The decision to keep information of individuals who avail offshore tax amnesty scheme confidential is in line with Organisation for Economic Cooperation and Development's (OECD) standards that advocate stricter protection of taxpayer record, said an aide of the prime minister on Wednesday.
"It is wrong to say that the prime minister's economic reforms package particularly the offshore tax amnesty scheme is against the OECD guidelines," said Special Assistant to PM on Revenue Haroon Akhtar Khan, while talking to the media. "The OECD also seeks protection of the taxpayer record."
According to the Foreign Assets Declaration Ordinance, the particulars of any person making a declaration, or any information received in any declaration, shall be confidential notwithstanding any law for the time being in force.
Roadblock: ‘Confidentiality aspect of tax amnesty goes against Constitution’
The amnesty has taken effect from Tuesday and will end on June 30. The government has offered people to bring back their offshore assets by paying only 2% tax and declare them at 5% rate if the assets are held abroad. Domestic assets can be declared at 5% but in case of foreign currency accounts the rate will be 2%.
The Article 19A of the Constitution provides right to information to every citizen, therefore, the constitutionality of a confidentiality clause in the Ordinance may be challenged, noted Tola Associates -the corporate and tax advisory firm in its commentary.
It is the fourth scheme that the Pakistan Muslim League-Nawaz (PML-N) government has offered during its current tenure. The previous three schemes had miserably failed. Akhtar said if this scheme also failed, this would be the result of the baseless propaganda and political bickering.
The Pakistan Tehreek-e-Insaf (PTI) has furiously opposed the package that is aimed at allowing people to whiten their black assets. The Pakistan Peoples Party (PPP) has given a mixed response, although the Senate former chairman Raza Rabbani announced to oppose the scheme in the Senate.
"Opposing the amnesty scheme is not in the interest of the country, as the scheme can fetch $5 billion to $10 billion that can ease out Pakistan's external account pressure," Akthar said. He insisted that there is no other way to bring back hidden offshore assets and other countries also offer amnesty schemes.
He said success of the scheme can end Pakistan's reliance on short-term commercial borrowings to boost the foreign currency reserves. "There is no mala fide in giving the tax amnesty scheme," he added.
To a question why the Federal Board of Revenue's (FBR) bureaucracy was against the package, Akhtar claimed that the FBR was not against the scheme. But he did not have an answer to the FBR Chairman Tariq Pasha's absence from the scene.
The special assistant said Pakistan has responded to the Financial Action Task Force (FATF) letter in which it has raised concerns about the negative impacts of the scheme on the global drive against money laundering.
Senator Akhtar said the government has legal and constitutional right to introduce any policy as long as it is in the power. "If the next government has any problems, it can reverse these measures," he said.
He said the government has also made it easy for the people to come in the tax net by drastically cutting down the income tax rate. "The effective income tax rate for people earning between Rs2.4 million to Rs4.8 million will be 6.5% against the new downward revised rate of 10%. People earning up to Rs1.2 million annually will be exempted from paying taxes from July," he said.
Akthar also inaugurated Restaurant Invoice Management System (RIMS), a technological based solution that enables monitoring of sales on real time basis thus reducing the human interface and bringing transparency in the tax collection process. The prime objective of RIMS is to facilitate the taxpayers by relying on modern techniques to tap the difference between current and potential collection.