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July 12, 2018

Amnesty beneficiaries declare Rs1.8trln assets, pay Rs97bln in taxes


July 12, 2018

ISLAMABAD: Tax amnesty beneficiaries have declared around Rs1.8 trillion of concealed foreign and local assets by depositing Rs97 billion in taxes to the exchequer since April, finance ministry said on Wednesday.

“Public response to the schemes has been positive,” the ministry said in a statement. “So far, 55,225 declarations have been filed in which declared value of foreign assets is around Rs577 billion and that of domestic assets is around Rs1,192 billion.”

The finance ministry said the declarants have paid around Rs97 billion out of which around Rs36 billion have been collected on foreign assets and Rs61 billion on domestic assets. “In addition, $40 million has been repatriated,” it said. “This response to the amnesty schemes has been unprecedented.”

The last government announced two tax amnesty schemes, namely, Foreign Assets (Declaration and Repatriation) Ordinance, 2018 for undisclosed foreign assets and Voluntary Declaration of Domestic Assets Ordinance, 2018 for undisclosed income and domestic assets.

The original closing date for filing declarations under the amnesty schemes was June 30. It was, however, extended till July 31.

Amnesty scheme for foreign assets applies to both liquid and immovable assets such as bank accounts, shares and mortgaged properties. Tax rates range from two to five percent, depending on the type of asset.

Special tax rate of two percent is applicable to liquid assets which are repatriated into Pakistan. The amnesty scheme for domestic assets covers all types of assets and income, with tax rates of two and five percent.

The finance ministry said the declarant information cannot be used as evidence against him as both the schemes were made part of the Finance Act 2018. Finance minister is monitoring the operation of the amnesty schemes and advising both the Federal Board of Revenue (FBR) and State Bank of Pakistan (SBP) to improve payment procedures and ensure effective facilitation.

FBR has set up help lines, which operate 24/7 with dedicated telephone lines and e-mails for quick response to queries related to the amnesty schemes. The SBP had also devised a procedure, whereby tax in dollar is deposited into SBP’s account through wire transfer for payment of tax on foreign assets.

Government issued US dollar-denominated Amnesty Rules 2018 whereby SBP has been authorised to issue the bonds having a maturity period of five years and annual profit of three percent to be paid semi-annually.

The finance ministry said revenues from the amnesty schemes will help in documentation of the economy as well as bring in onetime payment from non-declarant to officialise their assets. “Equally critical is to support Pakistan in its endeavour to reduce poverty and uplift its population, which depends on effective prioritisation of development spending.”

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