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June 23, 2018

Tax amnesty scheme: Govt warns action against owners of hidden assets after June 30

Business

June 23, 2018

ISLAMABAD: Government on Friday warned individuals with hidden local and foreign assets of ‘crippling’ consequences if they fail to meet the June 30 deadline of amnesty scheme to come into the tax net.

Muhammad Iqbal, member of Inland Revenue (Policy) of the Federal Board of Revenue (FBR) said there will be no extension in the deadline.

Iqbal, who is also the FBR’s spokesman, told media that the government would not extend the final date of the scheme and “neither the FBR has the authority to do so as this scheme was announced under a special law.”

In April, the previous government announced the tax amnesty scheme for three months to give residents one-off tax benefits for repatriating undeclared local liquid assets with a five percent penalty, undeclared foreign liquid assets with a two percent penalty (if repatriated, or a five percent penalty if remaining abroad or in foreign currencies), and undeclared fixed assets – whether held locally or abroad – with a three percent penalty. The parliament later rectified the scheme into the law.

Member Inland Revenue said the days of holding secret bank accounts and undeclared assets are coming to an end, as the country has already signed an Organization for Economic Cooperation and Development (OECD) convention to curb double taxation.

He said this is the most powerful instrument against offshore tax evasion and avoidance. The OECD’s convention provides all forms of administrative assistance in tax matters, including exchange of information on request, automatic exchange, tax examinations abroad, simultaneous tax examinations and assistance in tax collection among the signatory countries.

From September onwards, the FBR would be receiving all the details about the properties, bank accounts and other assets of Pakistan’s citizens from 120 countries. Iqbal said the government is getting good response to the tax amnesty scheme.

“It is much better than the responses on the schemes that were announced in the past.”

The FBR’s spokesman, however, declined to share the numbers of foreign exchange reserves and tax revenue so far received.

“Don’t insist on figures, and hopefully by next week we would disclose it,” he said. The amount collected under the scheme would be the part of the FBR’s normal collections, he added. The tax official said immovable asset holders must also declare their assets especially in real estate, as “we have already done mapping of plazas and other assets in this sector all over the country and have collected the data of the investors in them.”

Meanwhile, FBR Chairman Tariq Pasha said tax amnesty scheme is the best option to declare assets and foreign currency.

“It is better to declare and repatriate amount (assets) as tax authorities are tough and they will confiscate all the funds,” if hidden assets are not declared, Pasha said, addressing a conference.

“Non-payment of tax in foreign countries is criminal offense,” he said. The FBR is working on a list of Pakistanis who bought real estate in UAE.

“UAE government has shared a list of 55 Pakistanis confirming their assets,” the FBR chief said in a statement. “Now, FBR can trace data of all family members.”

He said the FBR is in contacts with builders to give details of investors who booked flats. “To curb money laundering all transfer of funds have been asked to handle through banking channels.”

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