ISLAMABAD: Tax authorities on Wednesday informed the National Assembly Standing Committee on Finance that they were considering proposals to introduce Amnesty Scheme for owners of offshore companies and properties abroad by paying tax at different rates.
Another proposal under consideration is withdrawing exemption for ascertaining source of income on money coming into the country through remittances in the upcoming budget 2017-18. But the Chairman FBR Dr Mohammad Irshad said that it would be major policy decision so he would not comment on it at this stage.
However, tax officials told The News after the NA panel that any such major policy decision could be brought as part of comprehensive package whereby Protection of Economic Reform Act 1992 might be amended through the upcoming budget.
However, the National Assembly Standing Committee on Finance which held its meeting under chairmanship of Qaiser Ahmed Sheikh threw light on different proposal for introducing amnesty scheme for offshore companies at rate ranging from 5 percent to 15 percent and even raising the rate up to 30 percent as recommended by Asad Umar from PTI to avoid perception that honest taxpayers were penalised at the cost of those who used to evade taxes in Pakistan.
The Chairman of NA Panel disclosed that State Bank of Pakistan (SBP) in their written reply, extended support for asking questions related to source of income on money sending into Pakistan in shape of remittances. But the representative of SBP who was present in the meeting said that he did not know about it.
Asad Umar belonging to PTI argued that there should be reasonable threshold resulting into excluding 90 percent remittances from any change in law where source of income might be questioned for enjoying exemption.
But the Chairman FBR Dr Mohammad Irshad replied different queries cautiously by stating that budget related proposals were secret and could not be disclosed publicly. When insisted by the Parliamentarians, the Chairman FBR said that the Tax Reform Commission (TRC) had proposed scheme for regularising assets outside Pakistan with tax rate of 15 percent and they were considering this proposal but nothing so far finalised on this subject related to upcoming budget 2017-18.
Some MNAs especially Syed Mustafa Mohammad and Mohammad Ali Rashid opposed the move for supporting any amnesty scheme. They stated that different amnesty schemes were introduced but all were failed because the government had failed to show its muscles to tax evaders.
The FPCCI representative said that the amnesty scheme should be introduced with rate of less than 5 percent. The Chairman of the Committee said that different stakeholders were consulted on this amnesty scheme and TRC as well as the business community had largely supported this idea. One industrialist Anjum Nisar who was invited on special invitation into the meeting, sternly opposed any fresh amnesty and said that such move would discourage the honest taxpayers and cited example of India as they introduced regularisation of foreign assets by paying 50 percent tax rate.
On taxation related to real estate, the builders’ (ABAD) representative said that three different valuations existed on ground as one is DC rate, FBR notified valuation rate and third real market value so the rate should be reduced to one percent instead of 3 percent for those who declared real market value of their plots.
However, the Chairman of the Committee said that they would propose to the government and the FBR for jacking up valuation rate notified by the FBR for the next budget.
On the issue of reducing duty related to chemical produced by NIMR Chemical Pakistan, the Chairman Committee Qaiser Ahmed Sheikh left the chair of the meeting and handed over the proceedings to Daniyal Aziz keeping in view conflict of interest. However, after hearing all sides, Daniyal Aziz decided that the cascading principle will be implemented for import of raw material and finished product related to this sector and he directed the FBR to devise a formula where duty structure did not affect all parties concerned.