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June 24, 2018

FBR says ‘bulk of declarations’ under tax amnesty received from Dubai


June 24, 2018

KARACHI: Dubai is the offshore destination of choice for Pakistanis to park untaxed money as bulk of funds against declaration of foreign assets under the amnesty scheme were received from the Emirates, a top tax official said on Saturday.

“We will disclose more details regarding declarations of foreign assets on June 30,” Tariq Mahmood Pasha, chairman Federal Board of Revenue (FBR) told a gathering of businessmen.

The government in April announced a tax amnesty aimed at broadening the revenue base of the country where only about 1 per cent of the adult population is tax payers.

Under the plan, all Pakistanis will be able to declare their unreported income and assets and bring their money into the tax base after paying a 5 per cent one-off penalty. Pakistanis living overseas and declaring income or assets would pay a 2 per cent one-time penalty.

Media recently reported that Pakistanis have bought properties worth Rs1.1 trillion in Dubai in the past one-and-a half-decade. Around 7,000 rich Pakistanis bought luxury residential villas/flats/estates in 12 renowned localities in the Emirati capital.

With the expiry of the deadline for declaring illegal assets fast approaching, billions of rupees hidden in foreign bank accounts or funnelled into property abroad are likely emerge into light - or so the government hopes.

Rating service Moody’s expected the government’s tax amnesty scheme to have a modest impact of around $2-3 billion in foreign exchange inflows.

Pasha asked businessmen to avail the amnesty as those “failing to declare their assets would face the music after June 30, 2018”.

“If we find any undisclosed assets after the amnesty expires, the owners of such assets would be liable to pay the tax as well as the penalty, which would go as much as 70 percent of the value of such assets,” chairman FBR said at a meeting held at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI).

Pasha said anti-money laundering regime is getting stricter globally. “If foreign agencies and authorities should find any undeclared assets and properties, the same would be confiscated,” he added.

He said even FBR has employed advance tools and entered into global information sharing regime under Organization for Economic Co-operation and Development (OECD). "From September 1 onwards, the FBR would be receiving all the details about the properties, bank accounts and other assets of Pakistan’s citizens from 102 countries."

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