While availing amnesty, transgender activist declares Rs100m worth of assets

Despite over Rs100b tax contribution, FBR fell short of its annual target exposing poor tax machinery

ISLAMABAD: The country’s latest tax amnesty scheme, the fourth in the last many years, has sprung another surprise as Almas Boby, a transgender activist, has declared over Rs100 million assets.

Boby filed the tax amnesty declaration with Regional Tax Office (RTO), Rawalpindi, of the Federal Board of Revenue (FBR) under Voluntary Domestic Assets Declaration Scheme 2018, FBR officials said.

According to the Act of the Parliament, the FBR cannot ask people to disclose their sources of income before availing the scheme. So, Boby was not required to disclose the source of her earnings.

The law also ensures complete secrecy to those who avail the scheme, but an RTO official breached the law and posted Boby’s picture on his Facebook page.

Almas Boby declared approximately Rs110 million worth of assets and paid nearly Rs5.5 million in tax at the rate of 5%, according to an FBR official who assisted Boby in filing the declaration. She declared immovable assets in her amnesty return forms.

“Usually people do not expect transgender persons to pay taxes due to their poor socioeconomic conditions, but Boby’s efforts should be appreciated at the national level”, said the official. Interestingly, the scheme has primarily been designed to provide an opportunity to those who were feeling the heat of Organisation for Economic Cooperation and Development (OECD) crusade against tax evasion.

Amnesty schemes have never been successful. So far, the country has offered about one-dozen schemes — four of which were offered by the last Pakistan Muslim League-Nawaz government. However, the latest scheme received a good response.

According to some unofficial reports, so far in a single case, a maximum of $1.2 billion foreign assets have been declared by a Karachi-based businessman.

The FBR expects to receive $2 billion to $4 billion in revenues, but till June 30, tax contributions from the amnesty scheme were nearly Rs75 billion, excluding the provisional Payment Slip IDs that are also valued over Rs60 billion.

Despite over Rs100 billion tax contribution, the FBR fell short of its annual tax collection target for the fiscal year 2017-18 by Rs240 billion, exposing poor governance of the tax machinery. Against the requirement of Rs4.013 trillion, the FBR could provisionally pool Rs3.77 trillion.

A Karachi-based businessman, who had amassed a fortune through NATO container contracts, has also availed the scheme. So far, people have whitened about Rs2.4 trillion domestic and foreign hidden assets.

The schemes had originally been offered from April 10 to June 30 but people started availing late due to delays on part of the authorities. On Saturday, President Mamnoon Hussain promulgated two ordinances aimed at giving one-month extension in the scheme till July 31.

The offshore amnesty Ordinance also allows authorities to accept all those decelerations after July 31 where the tax payments have been made till July 31.

In addition to extending the scheme till July 31, the revenue board has also got an opportunity to cover some of its illegal actions that it took after June 15 by bringing changes in the original law.

Earlier, the FBR had illegally excluded income earned during the fiscal year 2017-18 from the scope of the tax amnesty scheme and changed the formula for valuation of foreign assets.

Now, it has inserted an explanation in the Voluntary Domestic Assets Deceleration Act that states, “The income does not include income which was not required to be disclosed by 9th April”, which was the day when the amnesty became effective. After this legal amendment, the income earned during the fiscal year 2017-18 cannot be disclosed under the tax amnesty scheme.

Similarly, the FBR has made an amendment in Foreign Assets (Deceleration and Repatriation) Act that states, “Value of the rupee shall be computed by applying SBP’s rates between the foreign currency of the jurisdiction in which asset is located and rupee prevailing the date of filing declaration”.

These two amendments are tantamount to an admission that the FBR earlier gave illegal explanatory notes. Legal experts say these new amendments will be applicable to only those who declare their assets after June 30.

Through the Presidential Ordinance, the FBR has also excluded all those taxpayers from the scope of amnesty whose cases have attained finality under the Income Tax Ordinance of 2001.

It has also allowed amending amnesty declarations that had been filed till June 30 provided applicants committed some mistakes. However, in case of revision, the taxpayer will have to declare an amount that should be higher than earlier disclosed.