ISLAMABAD: President Arif Alvi on Wednesday signed off on the ordinance confirming the extension in the tax amnesty scheme.
A day earlier, the amnesty scheme was approved in a session of the federal cabinet chaired by Prime Minister Imran Khan in Islamabad. The tax amnesty scheme allows citizens to declare previously undisclosed assets in a bid to identify high earners for more efficient tax collection.
On Tuesday, Amnesty Scheme was approved by the federal cabinet.
People living in Pakistan can declare their assets after paying 4 per cent tax. Those living outside the country will have to pay 6 per cent tax and declare their assets, according to details, the proposed amnesty scheme stated.
The amnesty scheme will end on June 30, 2019, and there will be no extension.
Speaking to media in a press conference, Adviser to Prime Minister on Finance and Economic Affairs Dr Abdul Hafeez Shaikh said the objective of the amnesty scheme was not revenue generation but formalisation and documentation of the black economy.
Shaikh said, “we have tried our best to make this scheme as simple as possible so people do not have problems understanding it and implementation is seamless.”
“The philosophy is not to threaten or intimidate people but to encourage businessmen,” he said.
He said every Pakistani citizen – with the exception of public office holders and their dependents – can benefit from the scheme to disclose all previously undisclosed assets both abroad or in Pakistan.
Explaining the particulars, Shaikh said citizens could use the scheme to whiten previously undeclared assets abroad by paying a 4% tax.
He said the earlier existing condition for declaring cash was to keep the amount in a Pakistani bank account, now those who wish to keep the money abroad after getting it whitened would have to pay 6% tax.
About disclosing properties, Shaikh said that the value on which tax would be charged would be the market value, given that it is not less than 1.5 times the FBR-assigned value.
He made it clear that the June 30 deadline would not be extended as the scheme is the last opportunity for Pakistani citizens to declare previously undisclosed assets before the law takes its course.
Shaikh said the scheme will also facilitate holders of benami (nameless) accounts and properties in declaring their assets before they are confiscated under a new law for benami assets, which also carried the possibility of prison sentences.
Shaikh repeated that the scheme is the last chance for citizens “to try and come and avail this opportunity” before the law takes its course.
Following are the recommendations of the scheme:
5 per cent tax on individuals declaring assets by June 30, 2019
10 per cent tax on individuals declaring assets by September 30, 2019
20 per cent tax on individuals declaring assets by December 31, 2019
Recommendation for investment in Pakistan Banao Certificates for those declaring assets abroad
Recommendation for tax amnesty scheme for real estate sector
1 per cent tax on those declaring property by June 30, 2019
2 per cent tax on those declaring property by September 30, 2019
4 per cent tax on those declaring property by December 31, 2019
The scheme will also be applicable on benami accounts
3 per cent tax on undeclared sales
The scheme cannot be availed by individuals holding government positions after 2000
The scheme will not be applicable on cases being heard in court
The cabinet is also expected to be briefed on proposed measures to control the prices of essential commodities amid rising inflation.
It is also expected to discuss the $6 billion bailout package agreed upon with the International Monetary Fund.