The FBR had launched an extensive campaign to make the amnesty scheme successful. PHOTO: FILE
“Keeping in view the trend of asset declarations and feedback from tax consultants and chartered accountants, the final figure can be close to $3-4 billion,” announced Federal Board of Revenue (FBR) spokesperson Dr Muhammad Iqbal while speaking at a press conference.
“People who will not avail themselves of the scheme will have to face serious consequences. They should be ready to face action,” he remarked.
Explaining Pakistan's 'greatest' tax amnesty scheme
When asked about reaction of the Financial Action Task Force (FATF) to the amnesty scheme, Iqbal, who is also senior member of Inland Revenue Policy, said concerns of the FATF had been addressed.
While drafting the scheme, he said, the government also took input from the FATF whose concerns were only related to money laundering.
Responding to a query, he clarified that proceeds of crime could not be legalised under the amnesty scheme, which was available to all citizens of Pakistan except for public office-holders.
He described response to the scheme as very positive, but said last date of June 30 for filing asset declarations would not be extended.
He voiced hope that the government would achieve multiple benefits from the scheme, most important of which was the flow of foreign assets into the country.
“If the scheme is fully successful, the balance of payments issue will be resolved. Moreover, the FBR will also receive tax on the declaration of assets held abroad,” he said.
Replying to another question about the deposit of cash in bank accounts by Pakistanis holding undeclared assets in the country, Iqbal pointed out that such people were not required to deposit cash for availing themselves of the amnesty.
“The government wants to bring back money held by Pakistanis abroad, but we cannot allow them to legalise money by purchasing dollars from local open market,” he said.
Tax amnesty scheme: Major issues resolved, claims FBR official
He emphasised that the FBR had launched an extensive campaign to make the scheme successful. However, during visits to different chambers and trade bodies, it seemed that there was a little bit of confusion among businessmen and traders. To address that, he said, the FBR then launched an awareness drive.
About the pace of asset declarations, Iqbal revealed that first declaration was made on April 13 or 14 and then it gained momentum.
He asked real estate investors to voluntarily declare their assets as the FBR was equipped with real estate data after the mapping of properties through a survey. He categorically said real estate developers and builders had a unique opportunity to legalise their hidden assets under the scheme.
“Traditionally, people file tax returns close to the last date. Similarly, a large number of declarations are expected in the last few days of the scheme,” he said, adding tax collection under the scheme would be made part of overall FBR’s revenue receipts.
The FBR’s senior member emphasised that ambiguities had been removed from tax laws pertaining to foreign assets under the Finance Act 2018.
According to an amendment made in the Protection of Economic Reforms Act 1992, a person, who is a non-filer of tax return, is prohibited from depositing any cash in any foreign currency account.
Among other amendments in the Finance Act, the FBR has introduced the concept of foreign income and asset statement to be filed by persons having foreign income or assets as specified in the law.
A big change has been made regarding time limitation for opening past accounts/records beyond the period of five years. The FBR can now tax foreign assets from the year of their discovery irrespective of the date of creation of such assets.
About the number of tax return filers and the amount deposited under the amnesty scheme, the FBR’s senior member said data was expected to be shared next week.
“At this stage, we cannot share the data, but so far the response is very encouraging and positive compared to the amnesty schemes announced in the past,” he claimed.
Published in The Express Tribune, June 23rd, 2018.
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