New assets declaration scheme comes into force

KARACHI: Government on Saturday unveiled procedures for the documentation of the concealed assets against concessionary tax payments, bringing into force the much-awaited amnesty scheme in the country that is struggling to broaden its tax base and mobilise resources.

The State Bank of Pakistan (SBP) and the Federal Board of Revenue (FBR) simultaneously notified the procedures for deposit of tax against foreign assets to be documented.

The government announced the assets declaration scheme in the middle of the current month, but its implementation hinged on implementation procedures by the banking and tax authorities.

The government aims to double the tax revenue from the assets’ declaration scheme compared to the last year’s amnesty that fetched Rs120 to 125 billion in revenue and to increase number of return filers that stand at 1.8 million.

The SBP said the asset held outside Pakistan and foreign currency held in the country needs to be converted into rupee under the exchange rates as “may be notified on daily basis by the SBP to the FBR through dedicated email in respect of ten currencies i.e. AED (UAE Dirham), AUD (Australian dollar), CAD (Canadian dollar), CHF (Swiss Franc), CNY (Yuan), EUR (Euro), GBP (Pound), JPY (yen), SAR (Riyal), and USD (dollar)”.

The SBP said the taxpayer needs to convert the currency into rupee by using the given formula if the foreign currency-denominated assets are in a currency other than those specified. The taxpayer should declare the value of his/her assets held outside Pakistan on the FBR web portal in respective foreign currency and equivalent rupee.

“The system will generate tax liability of the taxpayer in PKR by applying the relevant tax rate for each category of disclosed assets,” it said in a statement.

“The taxpayer has the option of discharging his/her liability either in USD or AED. After selection of tax payment currency, the system will compute the tax liability in both PKR and USD/AED. The sequential number of PSID (PSID Number) will be recorded by the taxpayer in his/her own record, besides taking the print thereof.”

The SBP said the assets that need to be included in the foreign currency held in Pakistan include cash held by the declarant, which is deposited into a bank account, foreign currency held in declarants’ own foreign currency bank account and retained in the said account, and face value of the amount invested in Pakistan Banao Certificates.

“The payment of such tax shall be made locally through local USD clearing accounts of the bank maintained with the State Bank of Pakistan for which purpose the taxpayer shall advise their banker to issue a debit authority in favour of chief manager SBP, authorising to debit the account to the tune of the tax liability,” it said.

The FBR said it has been made mandatory for individuals intended to avail amnesty scheme to file income tax return for tax year 2018 in addition to file wealth statement and financial statement for the period ended June 30, 2018. The FBR said the returns should be filed by June 30, 2019 for tax year 2018 in order to avail the amnesty scheme.