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May 14, 2019

Tax amnesty scheme to be tabled before cabinet today

Top Story

May 14, 2019

ISLAMABAD: The government has decided to table tax amnesty scheme before the federal cabinet on Tuesday (today) with proposed rate of 4 percent for declaration of domestic assets and 1.5 percent for foreign assets.

After getting approval from the cabinet, the presidential ordinance would be promulgated anytime to this effect. The rate for property under this proposed amnesty scheme will be different, said a top official while talking to The News on Monday.

The FBR has started making preparation for launching a vigorous campaign to lure potential income holders to avail themselves of this scheme at a time when the FBR possesses powers after enactment of Benami Act and making it operational.

However, any tax amnesty without carrot and stick never succeeded in any part of the world and it would again replicate same results if the stick carried no carrot along. After striking a staff level agreement with the IMF, the government has decided to unveil tax amnesty scheme with deadline of June 30, 2019 as the Fund has barred the authorities from extending amnesty after formally entering into the IMF arrangement.

The FBR’s team under Chairman FBR Shabbar Zaidi gave an extensive briefing to Advisor to PM on Finance Dr Abdul Hafeez Shaikh about the salient features of the proposed tax amnesty scheme.

The government intends to give one and a half month period for availing of this scheme with the deadline of June 30, 2019. It is expected that the FBR could generate Rs140 to Rs170 billion revenue with the help of this scheme but insiders believe without proper planning and provision of stick it would prove a failed scheme.

The last scheme introduced during the tenure of PML-N had resulted into collection of taxes to the tune of Rs90 billion and more than 95 percent was availed by those who were already return filers.

This indicates that the real potential of wealth and income potential lies among the existing return filers. But they are very clever people and the FBR will have to ensure effective enforcement to achieve success.

The presidential ordinance can be promulgated within 24 hours after getting approval of the federal cabinet. The FBR is ready for launching a campaign in print and electronic media to give its message loud and clear that the long arm of law would not spare any tax evaders after expiry of upcoming tax amnesty scheme.

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