Islamabad : Leading tax consultants have expressed their reservations over recently announced asset declaration scheme terming it vague, confusing and full of mistakes.
The hurriedly framed Asset Declaration Ordinance 2019 will not serve its purpose due to ambiguities as the tax bar associations and other stakeholders were not consulted, they said.
Speaking at a seminar arranged by Rawalpindi Islamabad Tax Bar Association (RITBA), tax consultants Hafiz Muhammad Idrees, Habib Fakhruddin, President of RITBA Syed Tauqeer Bukhari and others said that the move will remain counterproductive if the anomalies were not rectified.
They said that the scheme has been launched to bring owners of the undeclared assets into the tax net but it is silent about undeclared income.
Similarly, if a person has not paid sales tax, he can get amnesty by paying two per cent tax but the scheme is silent about the profit earned through the sales which will result in harassment, they observed.
Hafiz Muhammad Idrees, Habib Fakhruddin, and Tauqeer Bukhari noted that only those can get the benefit of the scheme who purchased assets until 30th June 2018 while those who bought properties after that period have been kept out of the scheme.
However, the people who have purchased ‘benami’ properties have been given an undue advantage, they said, adding that the process of availing scheme for expatriates is also unclear.
The State Bank has notified a procedure regarding foreign assets declaration in the last amnesty scheme; now the government has asked SBP to issue procedure for the current scheme but it is not clear that the old procedure will be followed or a new one will be introduced and when the bank will issue notification, they said.
The incumbent government criticised former amnesty scheme in which property was legalized by paying five per cent tax which has now been reduced to 1.5 per cent benefitting builders and disappointing masses. The speakers noted that the former amnesty scheme was more detailed and clear but it was also misused as far as the declaration of income is concerned while the recent scheme needs a serious review to make it successful.
The method adopted for valuation of immovable property is full of errors which must be fixed without delay, they demanded.
The current scheme has empowered tax officials for assessment of properties and machinery etc., which will result in complaints of corruption, they warned.