ISLAMABAD: The tax experts on Tuesday rejected the draft tax amnesty scheme proposed by the Federal Board of Revenue (FBR) and asked the PTI-led regime to simplify this scheme and keep rate less than the last amnesty introduced during the PML-N-led regime to make it attractive.
The PML-N government had introduced tax amnesty scheme for declaration of domestic and foreign assets with rate of 2, 3 and 5 percent. The FBR has proposed higher rates for the upcoming tax amnesty scheme under the existing PTI regime where the maximum rate for one category was proposed at 15 percent. It was generally believed that the rate for amnesty beneficiaries should be on higher side so that the genuine taxpayers do not feel that that the non-filers got incentives after every few years.
However, one independent tax expert told The News on Tuesday that it was not ripe time for introduction of another amnesty scheme, arguing that there were individuals who had availed the last scheme to whiten their Benami accounts and assets. The FBR must have enforced Benami law to demonstrate its muscle before offering any such scheme because making law effective would not help the FBR enforce it with full power.
However, tax experts present in official meeting convened by Dr Hafeez Shaikh were almost unanimous that the rate of amnesty should be rationalised and kept it in lower side. The policymaking should not be left in hands of the FBR rather it should be only executing body of the policies approved by Prime Minister Imran Khan.
The sources said that Imran Khan will take final decision on amnesty scheme next week after his return from China. One participants of high-powered consultation session held under chairmanship of Adviser to PM on Finance Dr Abdul Hafeez Shaikh told The News that the FBR had proposed complicated scheme and cited an example that they inserted repatriation of foreign real estate into the country. Do you think that someone will sell his land or home and then will bring back either his asset or money into the country, he questioned?
Another participant said the government could offer amnesty scheme till end June 2019 because any scheme beyond this period might invite wrath of the IMF and the country could not afford it if it decided to go for another bailout package from the Fund.
The Ministry of Finance spokesman Dr Khaqan Najeeb stated in his tweet on Tuesday that Dr Shaikh directed the FBR to further improve the scheme making it easy to understand and more effective in broadening the tax base in light of useful suggestions of the participants. The consultation included tax experts, bankers, business community and financial sector experts.
Abdul Hafeez Shaikh held in-depth consultation on the asset declaration scheme to fine tune its scope, timing and rate. The meeting deliberated on all aspects of the scheme.
“Participants gave useful insights to ensure scheme’s effectiveness in strengthening economy,” he concluded.