Prime Minister Raja Pervez Ashraf has approved, in principle, two tax amnesty schemes to be introduced after approval of parliament in an effort to legalise hidden assets and broaden the tax net.
The premier took the decision to seek political backing for the schemes during a visit to the Federal Board of Revenue (FBR) head office here on Thursday. A money bill will be moved in parliament for formal approval of the schemes.
Earlier, it was proposed to introduce the schemes through a presidential ordinance, but “now the idea has been dropped as a session of the National Assembly has been called today (Friday) and the money bill can be tabled in the next session of parliament,” an FBR official said.
The incentive schemes will allow people to legalise local and foreign hidden assets irrespective of movable or immovable assets. These are expected to generate estimated revenues of Rs196 billion.
During the prime minister’s visit, FBR officials gave a detailed briefing on the proposed steps to broaden the tax base including bridging the human resource gap and upgrading pay scales of income tax inspectors.
According to the official, the prime minister directed the FBR to finalise the schemes and table them in cabinet for initial approval before putting them in parliament.
The official said about 2.3 million elite of the country did not even have national tax numbers (NTNs) and were not paying a single penny in tax. “The 1.8 million taxpayers who are not filing income tax returns will also be the main target of the amnesty schemes,” he said.
At present, there are 3.2 million NTN holders in the country, of whom only 1.4 million file tax returns or statements.
In the presentation based on data of the National Database and Registration Authority (NADRA), the prime minister was told that 1.611 million people travel abroad frequently, 0.584 million have multiple bank accounts, 56,451 live in posh localities, 19,141 own luxury vehicles, 66,736 pay more than Rs100,000 per month in utility bills, 13,201 rich have prohibited and non-prohibited arms licences and move along with a large convoy of vehicles and 25,133 are doctors, engineers and other professionals.
“These people will have to avail themselves of the amnesty schemes or face penalties,” the official said. If the FBR succeeds in its endeavour, the number of tax return filers will cross 4.2 million.
The tax evaders may face major penalties like placement of their names on the Exit Control List (ECL), cancellation of passports and Computerised National Identity Cards (CNIC) and seizure of bank accounts.
According to the official, at present 62,000 companies are registered in the country, but only 21,000 file tax returns and only 3,000 show profits and pay taxes.
Published in The Express Tribune, October 5th, 2012.
COMMENTS (8)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
1714129906-0/Clint-Eastwood-(1)1714129906-0-270x192.webp)
First FBR does not need any bill to be passed to do their normal job which is to get the TAXES from people and corporations. How much money was obtained thru the previous schemes.They just have to freeze their accounts and CONFISCATE their properties. Once that is done, they will come to FBR and settle their TAXES. If they don't, Govt can sell their properties in public auction. That is the way IRS (tax dept) does in USA. They also add interest and late fee to the tax bill.This way they collect 150% of the tax amount and not 1% the way the FBR is doing. This is PATHETIC. No govt can survive in the long run with out good tax collection rate. For IRS ,collection rate is 99% and for Pakistan it is reported only 3-4% of people pay the taxes.FBR should wake up.
Previous tax amnesties have failed to generate much revenue and this one will fail too. Doing the same thing over and over again and expecting a different outcome each time is the very definition of insanity.
Government should computerize tax collections, by asking sellers of goods and services to get consumer code by government against 12% of their sales and government should give buyer 2% discount against their buying.
Computerize codes which any buyer can check by sending on certain number via mobile phone. Mobile phone bill should be the proof of the ownership to certain commodity and government will pay 2%. With the help of consumer code government can discourage fake goods and services and encourage new brands which initiate a healthy brand competition. Bills of services should carry the consumer code, help consumer to find qualified services. Town and village head can earn through verifying consumer code and further during resale of certain goods. This will encourage educated unemployed youth to start their own small business. Increase the business of mobile phone companies which means increase in jobs.@Parvez: But Christine Lagarde had the audacity to publicly blame the Greek people for not paying (enuf) taxes & that as reason for their troubles - she doesn't pay taxes herself! Lets not forget banksters push/impose debts. Imagine what would happen to the money lenders if you managed your affairs well & didn't need any loans.
It took me awhile to comprehend why IMF came out against the proposed tax amnesty. Granted it benefits some more than others, but end of day there is more money in the kitty, voluntarily. And that should also please the creditors as your improved cash position would allow you to better service the odious debts. Guess the banksters are more keen to see you default.
American business woman Leona Helmsley said it beautifully ' We don't pay taxes. Only the little people pay taxes. '........................how true.
This is not an amnesty scheme...this is a financial NRO!!! Are we so stupid that we don;t understand the fact that you can't give blanket immunity for crimes just because a large proportion of the population is involved in the said crimes....
Let the Parliament be told that in Pakistan only 5,75,000 business returns are filed and Amnesty scheme followed by strict action and serious tax reforms is the only way forward. Amnesty is a necessary evil
Tax Amnesty scheme has to be followed up with fast track tax reforms and automation to cross match business transactions.