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April 12, 2019

‘Beneficial ownership needs to be revealed under tax amnesty’

Business

April 12, 2019

KARACHI: Beneficial ownership has to be disclosed to get undeclared local and foreign assets whitened under the upcoming tax amnesty scheme that is expected next week, sources said on Thursday.

The sources in the Federal Board of Revenue (FBR) said a benamidar will require disclosure of the beneficial ownership to avail the amnesty. Benamidar would require declaring nature of assets in possession and disclose the name of the beneficial owner.

The tax rate for benami assets has been proposed at 10 percent for the amnesty scheme 2019, which is likely to be introduced by the next week.

The sources said the amnesty will be available for all types of benami assets, including movable and immovable properties, securities, bank accounts, and vehicles.

They said the FBR is expecting a good response to the amnesty as the benami assets are first time to be included in the immunity package.

The previous tax amnesty that remained applicable during April-July 2018 fetched the government Rs120 to 125 billion in tax revenue.

The tax authorities have estimated around Rs250-300 billion in revenue from the new scheme.

The Benami Transaction (Prohibition) Act 2017 was promulgated in January 2017 and last month the FBR issued Benami Transactions (Prohibition) Rules 2019 to implement the act.

The sources said that a benamidar would be able to transfer the property to the real beneficiary as per the format provided through the proposed amnesty scheme. The real beneficiary will also be able to pay the tax amount for benami property, they added.

The Federal Board of Revenue ex-member Rehmatullah Khan Wazir said individuals or companies having benami properties would avail the scheme because the benami laws that carry severe punishment and penalties for concealing real ownership.

“The law provides seven years of rigorous imprisonment for having benami properties,” Wazir said. “Confiscation of benami properties is also part of the law.”

The tax expert said benami property purchased from money obtained from proceed of crime would not be part of the amnesty.

“There are numbers of businessmen who are maintaining bank accounts and possessing properties in fictitious names to conceal income,” he said. “Such businessmen would be eager to avail this scheme.”

Wazir said the past amnesty schemes were introduced only under income tax laws. Sales tax and federal excise laws have also been made part of the new scheme. Benami business supplies can also be declared.

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