PML-N fails to get tax amnesty bills passed through NA panel

While it has no legal ramification, endorsement would have acted as vote of confidence

ISLAMABAD: In what was a moral defeat for the ruling party, the federal government failed to get two of its endorsed bills passed from the National Assembly Standing Committee on Finance. The bills were tabled to seek the parliament’s nod for the tax amnesty scheme.

Members belonging to Pakistan Tehreek-e-Insaf, Pakistan Peoples Party and Muttahida Qaumi Movement joined hands to defeat the bill in the National Assembly Standing Committee on Finance. PML-N’s Qaiser Ahmad Sheikh chaired the committee meeting.

However, the government will still have a chance to get the amnesty scheme passed from the National Assembly by embedding related legal amendments in the Finance Bill 2018 it will table in the Assembly on Friday.



In case of the Money bill, the Senate does not have voting rights. The ruling party still enjoys simple majority in the lower house of the parliament despite recent defections.

After the standing committee rejected the government’s amnesty bill with a clear majority, there is no justification to implement the scheme, said the PTI’s MNA Asad Umar after the committee meeting.

The scheme is already in effect after President Mamnoon Hussain promulgated four ordinances to give cover to the tax amnesty scheme for whitening of local and offshore hidden assets. The validity period of any ordinance is four months and the government has offered the scheme only for 80 days. Despite the bills’ rejection, legally, the scheme will still be considered valid.

The president promulgated Foreign Assets Declaration and Repatriation Ordinance 2018, Pakistan Economic Reforms Protection Act Amendment Ordinance 2018, the Voluntary Declaration of Domestic Assets Ordinance 2018 and Income Tax Amendment Ordinance 2018.

The Supreme Court of Pakistan is also hearing a case regarding bringing back offshore assets held by Pakistanis. The apex court has constituted two committees for finalisation of recommendations to convince Pakistanis bring back their wealth stashed abroad.

On April 12, the federal government tabled all the four Ordinances in parliament to get its approval. The National Assembly Standing Committee approved the amendments in the Protection of Economic Reforms Act of 1992. Through this amendment, the government has authorized the FBR to ask the source of dollars being deposited in foreign currency accounts, partially withdrawing the secrecy clause. This is in line with the Financial Action Task Force’s recommendations.



Through the Income Tax Amendment Ordinance 2018, the government has also empowered the FBR to ask about the source of foreign remittances if the value exceeds Rs10 million in a tax year. Those who have foreign income and assets will now be required to file their foreign income and assets returns and statements. In case of offshore assets, the FBR has obtained the right to open old cases, abolishing the condition of five-year-old cases.

However, PTI’s Asad Umar said that this amendment in the Income Tax Ordinance would create confusion among taxpayers. He opposed the amendment.

The standing committee rejected the government’s Domestic Assets Declaration Bill and Foreign Assets Declaration and Repatriation Bill 2018. The government has offered foreign currency accounts holders to declare their liquid assets at only 2% tax. For all other domestic assets the rate will be 5%.

Towards the end of its term, the government does not have a mandate to approve an amnesty scheme, said Dr Nafisa Shah of the PPP. She, in principle, opposed to discuss the four bills in the committee meeting because of the same reason. Dr Shah said the tax amnesty scheme is meant to extend favours to the rich people in the country. PPP’s Mustafa Mehmood voted against the amnesty scheme.

The standing committee also recommended the government to present the next budget only for four months. However, Adviser to Prime Minister on Finance Dr Miftah Ismail has already turned down this proposal.

Published in The Express Tribune, April 24^th, 2018.

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