On expiry of tax amnesty scheme: FBR seeks full powers for confiscating undeclared assets

ISLAMABAD: Amid lingering differences over tax amnesty scheme within the federal cabinet, the Federal Board of Revenue (FBR) has proposed sweeping powers for confiscating/ freezing of undeclared assets and money against those who will not avail the proposed tax amnesty scheme after expiry of its deadline.

This proposal has been floated by FBR in writing before the cabinet to replicate Indian model where their income tax law allowed under section 132, 132A and 132B to take stern action including search, confiscation of assets and money that was undeclared before the tax authorities.

Without policy of carrot and stick, no amnesty scheme in any part of the world could succeed if provided only by carrot but lacked stick.

“We have proposed in all amnesty schemes in the past as well as in the existing one that the FBR requires powers to confiscate/freeze assets and money for moving long arm of the law against those who will not avail this last chance”, official sources confirmed while talking to The News here on Wednesday.

In the last tax amnesty scheme introduced during the PML-N led regime, there was only provision of carrot but there was stick so it availed by those who wanted to undermine future tax liabilities. The data of all those kept into secret files who availed this scheme so it tied hands of the tax machinery to undertake any campaign against biggest evaders in true letter and spirit.

Amid lingering differences among the federal ministers for launching another tax amnesty scheme, Pakistan’s different governments irrespective of military or democratically elected regimes provided 13 amnesty schemes since 1958 but all failed to yield the desired results.

It had always lacked stick even after providing carrot. So if the government wanted to create any difference then it must be coupled with stick otherwise it will meet with another failure. The toothless tax machinery cannot deliver for an effective enforcement.

The Indian Income Tax law under section 132 allows search and seizure and stated that where the Principal Director General or Director General or Principal Director or Director or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner has reason to believe that— (a) any person to whom a summons or under sub-section (1) of section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922, or under sub-section (1) of section 142 of this Act was issued to produce, or cause to be produced, any books of account or other documents has omitted or failed to produce, or cause to be produced, such books of account or other documents as required by such summons or notice, or (b) any person to whom summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been, or would not be, disclosed for the purposes of the Indian Income-tax Act, 1922 (11 of 1922) as the authorised officer) to— (i) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept; (ii) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (i) where the keys thereof are not available; (iia) search any person who has got out of, or is about to get into, or is in, the building, place, vessel, vehicle or aircraft, if the authorised officer has reason to suspect that such person has secreted about his person any such books of account, other documents, money, bullion, jewellery or other valuable article or thing.