Tax amnesty extension

The caretakers have given one more month to the Pakistani citizens to report assets previously undeclared to the tax authorities without fear of prosecution. The government announced the extension in the tax amnesty scheme as the previous deadline of June 30 expired and there were indications many might have missed the bus for a variety of reasons, including their own indecisiveness till the last minute or hobbled by slow-working administrative machinery. While this scheme was announced by the PML-N government, the caretakers avoided throwing it off the rails in the broader interest of the country, given how depleted they inherited the treasury. The interim government seems inclined to give full opportunity to tax felons to come forward and declare their assets by paying a measly sum to the public coffers and be counted as respectable taxpayers. It goes without saying that this apparently well-intentioned scheme has its detractors too, who frown upon the idea of giving any leeway to incorrigible tax thieves who have built their fortunes evading the tax net. But given the precarious state of the nation’s finances, so precarious that some quarters fear the country could default on sovereign debt repayments anytime soon, it seems prudent to gloss over the negative aspects and employ any measures that lead to replenishment of the foreign exchange reserves. The tax amnesty scheme is one such measure. Media reports suggest it could yield a significant amount to provide the much-needed respite. It is in this context that the federal cabinet approved a summary for promulgation of a Presidential Ordinance to amend the Foreign Assets (Declaration and Repatriation) Act, 2018 and the Voluntary Declaration of Domestic Assets Act to extend the amnesty schemes for offshore and domestic assets.

One hopes that the target set for the scheme is achieved before the extended deadline before authorities start cracking down on illicit money.

 

Published in The Express Tribune, July 2^nd, 2018.

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