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April 22, 2019

Amnesty scheme should focus on broadening tax net

Top Story

April 22, 2019

ISLAMABAD: Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh instructed the Federal Board of Revenue (FBR) to fine-tune the new tax amnesty scheme to make it simple to understand and easy to implement as he also emphasised that the objective of the scheme should focus on making the economy more tax compliant and documented and broadening the tax net, a statement said.

It said that the discussion focused on the scope and features of the scheme. Although, Prime Minister Imran Khan assigned the newly appointed Adviser on Finance Dr Abdul Hafeez Shaikh to simplify the proposed amnesty scheme and subsequently Dr Shaikh directed the FBR to analyse impact of proposed tax amnesty scheme in coming years before its final approval and announcement. The tax amnesty is usually used to avoid future liabilities only, so all these aspects should be kept in mind. The tax amnesty scheme should not be aimed at fetching revenues only but it should help achieve broadening of tax base, the sources quoted Dr Shaikh as saying during the meeting.

After enactment of Benami law and making it operational through issuance of rules, the FBR considers that the tax amnesty scheme is essential for giving last chance to businessmen for declaring their assets and income by making adjustments in their books because currently they are making business deals out of their books.

“We want to give them chance to bring all assets and income on their balance sheets as without improving their balance sheets they cannot undergo joint ventures,” top official sources confirmed to The News here on Sunday. The upcoming tax amnesty scheme will be altogether different from the previous ones because these schemes had mainly focused on individuals but now the FBR was asking the government to allow businessmen to declare their income for improving balance sheets which was usually kept out of loop of the FBR records for the purpose of avoiding due taxes.

Although, the tax amnesty scheme is not on the agenda of next cabinet meeting but Prime Minister Imran Khan has assigned Adviser on Finance Dr Abdul Hafeez Shaikh to simplify the proposed scheme with the objective to broaden the tax base.

“Yes, it is not on the agenda of next cabinet meeting but we may convene special meeting on the tax amnesty scheme to get approval on this scheme. The tax amnesty scheme will further be simplified after getting guidance from Adviser to PM on Finance Dr Abdul Hafeez Shaikh for the objective of broadening of tax base instead of introducing it as one time revenue measure,” Minister of State for Revenues Hammad Azhar told The News after attending high-powered meeting under chairmanship of Dr Hafeez Shaikh on tax amnesty scheme here on Sunday.

The Ministry of Finance in its official announcement stated that Dr Abdul Hafeez Shaikh, Adviser to PM on Finance, Revenue and Economic Affairs reviewed the proposed Assets Declaration Scheme–2019 in detail with FBR officials on Sunday.

However, Minister of State for Revenues Hammad Azhar said that the timeframe for availing of the amnesty scheme was not yet firmed up. To another query, he said that the amnesty scheme was not on the agenda of next cabinet meeting but special cabinet meeting might be convened afterwards to get approval of the scheme.

The PTI-led government on Sunday decided in principle to allow businessmen to adjust their balance sheets for bringing their real assets and income on books through availing themselves of upcoming tax amnesty scheme, it is learnt.

The PTI government wants to introduce tax amnesty scheme but they will have to go ahead before finalising staff-level agreement with the IMF on fresh bailout package. The IMF mission is expected to visit Pakistan probably from April 28 or 29 so the government could introduce this amnesty scheme within next two weeks.

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