Govt plans to roll out amnesty scheme for foreign assets on March 15

KARACHI: Government is all set to roll out a planned tax amnesty programme on March 15 as it seeks to boost revenues by encouraging the repatriation of billions of dollars of funds stashed abroad, a minister said on Tuesday.

Rana Muhammad Afzal, minister of state for finance and revenue, said the country, facing a sizable revenue shortfall, is counting on to bring home billions of dollars citizens have parked overseas to increase foreign exchange reserves and to meet debt obligations.

“The government has already planned the amnesty scheme and it wants to give an opportunity to people to bring back their assets into the country,” Afzal told members of the Pakistan Hosiery Manufacturers and Exporters Association.

The proposed amnesty scheme is the fourth to be launched by the present government.

“The government is focusing to increase foreign exchange reserves as an amount of $3 billion is scheduled to pay (till June-end) to IMF (International Monetary Fund).”

The minister said foreign exchange reserves declined due to significant rise in imports. Import bill during the last fiscal year was $55 billion. The bill, however, included imports of power generating and other machinery.

Afzal said the government also planned to rationalise tax rates in the budget for the next fiscal year of 2018/19.

“Increasing minimum threshold for income tax to Rs800,000 from existing Rs400,000 is also under consideration,” he added. Similarly, the government is also devising a plan to reduce corporate income tax rate to 20 percent from 30 in a phased manner.

The state finance minister said revenue collection is on track and Federal Board of Revenue has so far maintained revenue growth of 20 percent, which would help in achieving the current fiscal year’s target of Rs4,013 billion.

The minister said business community across the country is worried about high cost of production. Industrialists in Punjab are worried due to high prices of imported liquefied natural gas prices.

On sales tax refunds, Afzal said the government had set deadline of February 15 for releasing all the outstanding refunds, “but due to engagements of finance ministry related to Financial Action Task Force the refund payments were delayed”.

“There is no change in policy for sales tax refunds,” he said and added that all those refund claims where refund payment orders have been issued would instantly be paid. The minister estimated payable refunds at around Rs160 billion.

The minister said the government is endeavouring to comply with international laws in order to improve exports. He said compliance related to generalised scheme of preference plus has been improved during the past four years.

The minister said economic environment had been improved, which boosted confidence of foreign investors.

Javed Bilwani, chairman of Pakistan Apparel Forum said exporters are facing immense problems due to high cost of production and stuck sales tax refunds.

Bilwani said government announced Prime Minister Trade Enhancement package, but no relief was provided to the exporters. “Further, the government has promised to release all stuck refunds but the promises were not honoured.”

The forum’s chief said exporters were forced to obtain interest-based loans due to liquidity issues.

He complained against the attitude of customs authorities, saying they are focusing imports rather than giving facilitation to exports, which are major source of bringing foreign exchange into the country.