‘FBR to bring assets of Pakistanis in mainstream to make country prosperous’

MULTAN: Federal Board of Revenue (FBR) member Faheemul Haq has said that the FBR would have to bring the national and foreign assets of Pakistanis in mainstream to make the country economically strong and prosperous.

Addressing a seminar on tax amnesty scheme at the Multan Chamber of Commerce and Industry (MCCI) here on Thursday, he claimed that the offshore and domestic tax amnesty schemes had received unprecedented response, as over 55,000 declarations were filed to whiten Rs1.8 trillion worth of hidden assets. He disclosed that the tax amnesty scheme, contrary to the expectations, had so far received better response than the offshore tax amnesty scheme.

He said that the government announced the scheme with effect from April 10, primarily to offer the last opportunity to Pakistanis, facing increasing problems due to tightening of tax laws by the Organization for Economic Cooperation and Development (OECD).

The domestic amnesty scheme had been included at the later stage of planning due to initial opposition by the Federal Board of Revenue (FBR), he added. He made it clear that the scheme was not introduced for the benefit of a particular group or class. Everyone could avail this opportunity. “So far, 55,225 declarations have been filed in which declared value of foreign assets is around Rs 577 billion ($4.8 billion) and that of domestic assets is around Rs 1.192 trillion,” he said. He said that the total value of the hidden assets declared under both the schemes was Rs 1.8 trillion.

He maintained that Pakistan had also become a signatory to the OECD Multilateral Convention, which would provide access to information about offshore financial accounts of Pakistani residents from September 2018. He said that necessary amendments had also been made in the Protection of Economic Reform (PERA) Act, 1992, to regulate foreign exchange movements and bring it in line with Income Tax Ordinance, 2001. Moreover, amendments had been made in the Income Tax Ordinance, 2001, whereby the FBR might inquire about the source of foreign remittance above Rs 10 million and limitation of five years to probe foreign assets and income had been removed. Faheemul Haq said that the amnesty scheme for foreign assets applied to both liquid and immovable assets such as bank accounts, shares and mortgaged properties. Tax rates ranged from 2pc to 5pc, depending on the type of asset. Special tax rate of 2pc was applicable to liquid assets, which are repatriated to Pakistan, he added. He said that the amnesty scheme for domestic assets covered all types of assets and income, with tax rates of 2% and 5%. He also reiterated that the declarants were protected against any harassment and there was complete confidentiality of declarant’s information. Moreover, such information could be used as evidence against declarants under any other law, he added.

Chief Commissioner Inland Revenue Abid Raza Bodla said that the scheme was beneficial for all Pakistanis having undeclared or hidden assets in Pakistan or abroad.