Law to be amended
KARACHI: The Federal Board of Revenue is considering making an amendment to the tax laws so that all resident and overseas Pakistanis should be entitled to avail of the tax amnesty schemes introduced in the future.
In the past, all the tax amnesty schemes were allowed to Pakistani residents only. Under the Income Tax Ordinance, 2001, a resident individual has been defined as the individual present in Pakistan for a period of 183 days or more in the tax year.
“Subject to the approval of the parliament, every Pakistani by-birth irrespective of living abroad for the last many years, will be entitled for availing of any future tax amnesty,” an official of the FBR said.
The official said that the revenue authority is working on a general amnesty, which would be introduced soon.
The government is mulling the new amnesty on the demand of the business community, as amnesty given to real estate sector has failed to provide desired immunity. Under the amnesty, persons would be offered to declare assets either in Pakistan or abroad at a certain percentage and three different phases.
So far the planned tax rate is five percent for the first phase and 7.5 percent and 10 percent for the next two phases, the official added. Sources in the FBR said that the planned amnesty would mainly benefit Pakistanis living abroad and having wealth, which was accumulated without declaration.
Pakistanis living abroad were under pressure; following conditions imposed by the international community regarding tax evasion and money laundering, the sources said, adding that the new conditions under OECD platform member countries would be able to access information automatically. Similar conditions have been applied on the Gulf Cooperation Council (GCC) and the United Arab Emirates (UAE) where many Pakistanis have parked their ill-gotten money.
From January 1, 2017, banks in Dubai have started gathering information of their residents for the purpose of tax evasion and money laundering. This condition will apply to all residents and non-residents living in Dubai, the sources added. Recently, the Senate Standing Committee on Finance has expressed dismay over launch of amnesty for only real estate sector. The committee had asked the FBR to introduce amnesty, which should be applicable for all sectors of the economy.