Author: Faisal Shahnawaz

Amnesty Scheme -2019: text of presidential ordinance

SLAMABAD: The amnesty scheme announced by the government for foreign and domestic undeclared assets a day earlier has been launched through promulgation of presidential ordinance on Wednesday.

Following is the text of the presidential ordinance:

An ORDINANCE

To provide for voluntary declaration of undisclosed assets, sales and expenditure

WHEREAS there is a reportedly large scale non-declaration of assets, sales and expenditure;

AND WHEREAS it is expedient to —

a) Allow the non-documented economy’s inclusion in the taxation system; and

b) Serve the purpose of economic revival and growth by encouraging a tax complaint economy;

AND WHEREAS the Senate and the National Assembly are not in session and the President of the Islamic Republic of Pakistan is satisfied that circumstances exist which render it necessary to take immediate action;

NOW, THEREFORE, in the exercise of the powers conferred by clause (1) of Article 89 of the Constitution of the Islamic Republic of Pakistan, the President of the Islamic Republic of Pakistan is pleased to make and promulgate the following Ordinance:-

1. Short title, extent and commencement:

(1) This Ordinance shall be called the Assets Declaration Ordinance, 2019.

(2) It shall extend to the whole of Pakistan.

(3) It shall come into force at once.

2. Definitions:

(1) In this Ordinance, unless there is anything repugnant in the subject or context, —

(a) “assets” means all domestic and foreign assets of every kind ;

(b) “Board” shall have the same meaning as defined in clause (8) of section 2 of the Income Tax Ordinance, 2001 (XLIX of 2001);

(d) “declarant” means a person making a declaration under section 5;

(e) “holder of public office” means a person as defined in the Voluntary Declaration of Domestic Assets Act, 2018 or his benamidar as defined in the Benami Transactions (Prohibition ) Act, 2017 (V of 2017) or their spouses and dependents;

(f) “undisclosed assets “ includes benami assets as defined in the Benami Transactions (Prohibition ) Act, 2017 (V of 2017) and any assets the value of which has been unreported, under-reported or understated;

(g) “undisclosed expenditure” means any unexplained or unaccounted expenditure under the provisions of the Income Tax Ordinance, 2001 (XLIX of 2001) up to the tax year 2018, which has not been declared in the return of income or for which a return of income has not been filed and such expenditure is not accounted for;

(h) “undisclosed sales “ means sales or supplies chargeable to sales tax or federal excise duty under the Sales Tax Act, 1990 or the Federal Excise Act, 2005, respectively, which were not declared or have been under-declared up to 30th June, 2018.

(2) All other words and expressions used but not defined in this Ordinances shall have the same meaning assigned thereto under the Income Tax Ordinance, 2001 (XLIX of 2001), the Sales Tax Act, 1990, the Federal Excise Act, 2005, the Benami Transactions (Prohibition) Act, 2017 (V of 2017) and the rules made thereunder.

3. Declaration of undisclosed assets, sales and expenditure:

Subject to the provisions of this Ordinance, any person may make, on or before 30th June, 2019, a declaration only in respect of any .

(a) Undisclosed assets, held in Pakistan and abroad, acquired up to 30th June, 2018;

(b) Undisclosed sales made up to 30th June, 2018.

(d) Benami assets acquired or held on or before the date of declaration;

Explanation. It is clarified that the benefit under this Ordinance shall also be available where.

(a) Any proceedings have been initiated or are pending or where any income has been assessed under the Income Tax Ordinance, 2001 (XLIX of 2001), which are relatable to undisclosed assets or expenditure except where the matter has attained finality;

(b) Any proceedings have been initiated or are pending or have been adjudicated under the Sales Tax Act, 1990, or the Federal Excise Act,2005 which are relatable to any undisclosed sales or supplies except where the matter has attained finality.

4. Charge of Tax and default surcharge:

(1) The undisclosed assets shall be chargeable to tax and default surcharge at the value mentioned in section 5 and at the rates specified in the Schedule to this Ordinance.

(2) The undisclosed sales and expenditure shall be chargeable to tax and default surcharge at the rates specified in the Schedule to this Ordinance.

5. Value of Assets. Value of Assets

(a) In case of domestic immovable properties shall be the price not less than-

(i) 150 percent of the FBR value notified under sub-section (4)of section 68 of the Income Tax Ordinance, 2001 (XLIX of 2001); or

(ii) 150 percent of the DC value, where FBR value has not been notified or the FBR value is less than the DC value; or

(iii) 150 percent of FBR value notified under sub-section (4) of section 68 of the Income Tax Ordinance, 2001 (XLIX of 2001) for land and 150 percent of DC value for constructed property , where FBR value has not been notified for constructed property.

(b) In case of all oher assets, shall be the price which the assets would ordinarily fetch on sale in the open market on the date of declarationbut in no case shall be less than the cost of acquisition of the assets;

Provided that in case of foreign assets, the fair market value shall be determined at the exchange rate prevalent on the date of declaration.

Explanation: It is clarified as follows –

(a) In case any declarant has already filed a declaration in respect of any immovable property under the Income Tax Ordinance, 2001, or the Voluntary Declaration of Domestic Assets Act, 2018 and wishes to enhance the declared value of the said immovable property, he may file a declaration under this Ordinance in terms of the value mentioned in section 5 and above;

(b) In case a person has already filed a declaration in respect of any immovable property which is in line with section 68 of the Income Tax Ordinance, 2001, or the Voluntary Declaration of Domestic Assets Act, 2018 no further proceedings or action will be initiated against him in view of provisions of this Ordinance, in particular section 5 thereof.

6. Time for payment of tax:

(1) The due date for payment of tax chargeable under this Ordinance shall be on or before 30th June, 2019.

Provided that after the due date under this sub-section, the tax shall be payed on or before the 30th June, 2020 along with default surcharge at the rates given in clause (2) of the schedule to this Ordinance.

(2) The tax in respect of foreign assets or foreign currency held in Pakistan shall be paid in foreign currency according to the procedure prescribed by the State Bank of Pakistan, in the mode and manner provided in section 9.

(3) If a person fails to pay tax and default surcharge according to this section, the declaration made shall be void and shall be deemed to have never been made under this Ordinance.

(4) Notwithstanding the provisions of clause (g) of section 11, in case of outstanding demand at the time of filing of declaration, the declarant may pay the amount of such tax determined by the Officer of Inland Revenue, under the provisions of the Sales Tax Act, 1990 or the Income Tax Ordinance, 2001 (XLIX of 2001), or the Federal Excise Act, 2005, without payment of default surcharge and penalty.

7. Incorporation in books of account:

(1) Where a declarant has paid tax under section 6 in respect of undisclosed assets, sales and expenditure the declarant shall be entitled to incorporate such assets, sales and expenditure in his return, wealth statement or financial statement irrespective of the fact that the assets, sales or expenditure were relatable to a year which is barred by time for the purpose of revision of return of income or wealth statement, as a case may be.

(2) No allowance, credit or deduction under any law for the time being in force shall be available for assets so incorporated.

8. Conditions for declaration. The declaration made shall be valid if-

(a) Cash held by the declarant is deposited into a bank account in the manner specified at the time of declaration and is retained in such bank account upto the 30th June, 2019; or

(b) The foreign currency held in Pakistan declared under section 3 is deposited into declarant’s own foreign currency bank account at the time of declaration and is retained in such account till 30th June, 2019; or

(c) The repatriated foreign liquid asset is deposited into declarant’s own Pak Rupee account or his foreign currency bank account in Pakistan or is invested into Pakistan Banao Certificates or any foreign currency denominated bonds issued by the Federal Government; or

(d) Foreign liquid assets not repatriated to Pakistan shall be deposited in declarant’s foreign bank account on or before the 30th June, 2019.

9. Mode and manner of repatriation of assets held outside Pakistan and payment of tax thereon.

The State Bank of Pakistan shall notify the mode and manner of-

(a) Repatriation of assets to Pakistan;

(b) Deposit of tax in foreign currency through State Bank of Pakistan; and

10. Tax paid not refundable.

Any amount of tax or default surcharge paid under the provisions of this Ordinance shall not be refundable.

11. Ordinance not to apply to certain persons, assets or proceedings.

The provisions of this Ordinance shall not apply to:

(a) Holders of public office;

(b) A public cmpany as defined under clause (47) of section 2 of the Income Tax Ordinance, 2001;

(d) Gold and precious stones;

(e) Bearer prize bonds;

(f) Bearer securities, shares, certificates, bonds or any other bearer assets; or

(g) Proceedings pending in any court of law.

12. Declaration not admissible in evidence:

Notwithstanding anything contained in any other law for the time being in force, nothing contained in any declaration made under this Ordinance shall be admissible in evidence against the declarantfor the purpose of any proceedings relating to imposition of penalty or adverse action or for the purposes of prosecution under any law.

13. Misrepresentation:

Notwithstanding anything contained in this Ordinance, where a declaration has been made by misrepresentation or Suppression of facts, such declaration shall be void and shall be deemed to have been never made under this Ordinance.

14. Confidentiality:

(1) Notwithstanding any other law for the time being in force including the Right of Access to Information Act, 2017 (XXXIV) and sub-section (3) of section 216 of the Income Tax Ordinance, 2001 (XLIX of 2001), execpt the provisions of clauses (a) and (g) of sub-section (3) of section 216 of the Income Tax Ordinance, 2001 (XLIX of 2001), particulars of any person making a declaration under this ordinance or any information received in any declaration made under this Ordinance shall be confidential.

15. Power to make rules:

The Board may be notification in the official Gazette make rules for carrying out the purposes of this Ordinance including the manner, procedure payment of tax and conditions under which the declaration under this Ordinance shall be filed.

16. Ordinance to override other laws:

The provisions of this Ordinance shall have effect notwithstanding anything to the contrary contained in any other law for the time being in force.

17. Removal of difficulties:

If any difficulty arises in giving effect to the provisions of this ordinance, the Federal Government may, by notification in the official Gazette, remove such difficulty as is inconsistent with the provisions of this ordinance.

THE SCHEDULE
[see section 4]

Rates of Tax

1. The rates of tax imposed on undisclosed assets, sales and expenditures shall be as specified in the following Table, namely:

Table

S. No	Undisclosed assets, sales or expenditures	Rate of tax
(1)	(2)	(3)
1.	All assets except domestic immovable properties	4 percent
2.	Domestic immovable properties	1.5 percent
3.	Foreign liquid assets not repatriated	6 percent
4.	Unexplained expenditure	4 percent
5.	Undisclosed sales	2 percent

Rates of Default Surcharge

2. The amount of tax under clause (1) of the Schedule shall be increased by a default surcharge by amount percentage as specified in the following Table, namely:

Table

S. No	Time of payment of tax	Rate of default surcharge
1.	If the tax is paid after the June 30, 2019 and on or before the September 30, 2019	10 percent of the tax amount
2.	If the tax is paid after September 30, 2019 and on or before December 31, 2019	20 percent of the tax amount
3.	If the tax is paid after the December 31, 2019 and on or before the March 31, 2020	30 percent of the tax amount
4.	If the tax is paid after March 31, 2010 and on or before June 30, 2020	40 percent of the tax amount

May 16, 2019

OICCI welcomes Shabbar Zaidi’s appointment as FBR chairman

KARACHI: The Overseas Investors Chamber of Commerce and Industry (OICCI), has appreciated the appointment of tax expert Shabbar Zaidi as Chairman of the Federal Board of Revenue (FBR), a statement said on Wednesday.

The OICCI President, Shazia Syed commenting on the appointment said “Shabbar Zaidi, is a well-respected tax professional, who has been closely associated with tax policy and administration in Pakistan for many years.

The appointment of Shabbar Zaidi as FBR Chairman by the government is very commendable as it will strengthen the FBR capacity substantially.”

Shazia was confident that “with full support from a well experienced and large FBR team, the new FBR Chairman will be able to lead the needed transformation of the tax culture and significantly boost the tax collection, in line with the true revenue potential of the economy.”

The OICCI reminded that in the World Bank’s 2019 Ease of Doing Business (EODB) rating, Pakistan was assessed as the 17th worst country in the world on the parameter of ‘paying taxes’.

The OICCI is hopeful that with a rejuvenated FBR, supported by a close coordination among the provincial tax authorities, and government’s clear direction to improve on EODB, the country will significantly improve its EODB rating.

The recently concluded IMF–Pakistan staff level agreement also recommends tangible actions to revamp the tax regime and boost the tax to GDP ratio in line with the relevant international standards.

OICCI members comprising of leading multinationals operating in Pakistan contribute about one third of the total tax collection, the highest by any trade body.

OICCI has already submitted a series of progressive taxation proposals for the 2019-20 Fiscal Budget to FBR and provincial revenue authorities mainly focusing on facilitating investment and growth in the economy, including need for longer term incentives to boost FDI in the large greenfield and job creating manufacturing facilities, and ensuring implementation of predictable, consistent and transparent policies.

OICCI has also strongly urged for Revamping of Withholding Tax Regime from current over 50 sub-clauses/provisions to less than ten, with number of tax rates reduced substantially, better coordination between Federal and Provincial Legislations, with policies and tax rates harmonized across all jurisdictions, integration of all revenue authorities in such a way that each Authority remains functional but with one window solution for filing a simplified single return for both Federal and Provincial Taxes.

OICCI has also shown serious concern on the booming illicit trade with significant damage to revenue base of the economy and urged the authorities to re-visit Afghan Transit Trade agreement supported by structural reforms in Customs to stop the highly visible availability of smuggled foreign FMCG products.

OICCI has also given workable recommendations, including the use of IT technology, for substantially improving the Documentation of the economy and Broadening of Tax Base, besides reducing the frequency of interaction of the tax officials with the compliant tax payer.

May 16, 2019
Pakistan’s trade deficit narrows by 13pc in 10 months

KARACHI: Pakistan’s trade deficit has narrowed by 13 percent during first 10 months (July – April) 2018/2019 owing to significant fall in import bill, according to trade data released by Pakistan Bureau of Statistics (PBS) on Wednesday.

The trade deficit narrowed to $26.3 billion during July – April of current fiscal year as compared with the deficit of $30.17 billion in the same period of the last fiscal year.

The major reason behind shrinking trade deficit was reduction in import bill. The import bill was declined to $45.47 billion during first 10 months of current fiscal year when compared with $49.36 billion in the corresponding period of the last fiscal year.

The exports of the country, however, remained stagnant. The exports were at $19.17 billion during July – April 2018/2019 as compared with $19.19 billion in the same period of the last fiscal year.

The State Bank of Pakistan (SBP) in its third quarterly report said that most of the deficit reduction during Jul-Mar FY19 was recorded in Q3, when imports dropped quite sharply in response to a deepening decline in purchases of foreign power generation machinery, aircraft and railway locomotives; technical and administrative hiccups in LNG imports (and power generation); and a temporary softening in global oil prices.

Further support came from regulatory and macro stabilization measures taken earlier, which impacted industrial performance and reduced demand for imported raw materials (such as iron and steel), and also curtailed consumers’ demand for cars (thereby lowering imports of CBUs).

In percentage terms, the 18.1 percent decline in the overall imports in Q3-FY19 was the largest drop in a quarter in almost 10 years. It was more than sufficient to offset a 3.3 percent contraction in exports in the quarter, and led the trade deficit to drop by a sizable 27.6 percent

May 15, 2019
KCCI praises Imran Khan for providing relief to tax evaders through amnesty scheme

KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has praised Prime Minister Imran Khan for giving opportunity to tax evaders to document their black money at very low tax rates.

KCCI President Junaid Esmail Makda stressed that in order to make the amnesty scheme successful, the government will have to ensure complete secrecy and confidentiality of the declarants’ data at any cost otherwise, they will not be able to achieve the desired results.

He said that this amnesty scheme must not end up like the last one in which the highly classified data of those individuals who availed the previous amnesty scheme was shared with several government agencies including Federal Investigation Agency (FIA) and National Accountability Bureau (NAB) against the commitment to keep declarants’ info confidential.

Referring to government’s assurance to keep this scheme easy to understand, he hoped that the amnesty scheme has been devised in such a manner that number of queries are kept minimal as it is a well-known fact that individuals will be reluctant to respond to excessive queries seeking details about the source of income and other such questions because of fears of getting into any kind of trouble in future.

“The business community will be more than happy to become part of the documented economy but the government has to support them by protecting them from any kind of harassment from agencies/ institutions”, he added.

He further stated that although the government has provided the opportunity to become part of the scheme until June 30 but this scheme must be extended for a longer period.

After seeing the failure of previous amnesty scheme in which harassment by serving notices was widely witnessed, many individuals will be reluctant to declare their assets hence, the government must extend it and also has to take confidence building measures in due course to regain the trust of the masses.

“After seeing some success stories of those individuals who avail this year’s amnesty scheme, I am sure many others will also come forward to benefit from the amnesty scheme so it must be made available for a longer period to tap such individuals”, he added.

He was fairly optimistic that the scheme will help the government in bringing undocumented persons, assets and income into the documented sector. The scheme has the potential to bring in macroeconomic and fiscal stability in the economy.

President KCCI further stated that this scheme offers a lucrative opportunity to pay just 4 percent for legalizing Benami Assets within the country and 6 percent for assets outside the country while 3 percent tax for undeclared sales which was a good offer for whitening the black money.

While complimenting Chairman FBR Shabbar Zaidi for taking pro-business steps, Junaid Makda hoped that he would continue to do so throughout his tenure which would help in restoring the confidence of business community to a great extent and that in turn would lead to economic prosperity for the entire country.

He advised Chairman FBR to formulate practical policies to increase the tax net and catch tax evaders in order to strengthen the country’s economy.

The loyal taxpayers are being overburdened every year to achieve the revenue targets whereas those outside the tax net continue to enjoy all the luxuries of life without contributing a single rupee to the national exchequer, he opined, adding that FBR has been claiming of having details of all such tax evaders since many years but unfortunately no action has been taken so far to strictly deal with them.

May 15, 2019
Prime Minister takes notice of rupee depreciation

KARACHI: Prime Minister Imran Khan took notice of recent depreciation of rupee in the open market. In this regard the prime minister met a delegation of Exchange Companies Association of Pakistan (ECAP) on Wednesday at Prime Minister House.

The ECAP delegation was led by Sheikh Allaudin, Malik Bostan, and Sheikh Mureed. Director General FIA, Director General IB, Chairman Federal Board of Revenue and Governor State Bank of Pakistan (SBP) were also present at the meeting.

The government made it crystal clear that it will take strict action against Exchange Companies, which involve in creating artificial shortage of the foreign currency, a member ECAP said.

The meeting agreed on exchange rate and the government warned of serious consequences in case of deviation.

Dollar rate agreed upon are Buying – 143.50 and selling 144.00

Saudi Riyal buying and selling at 38.20 / 38.35

UAE Dirham buying and selling 39.05 / 39.20

Strict compliance has been insisted upon

ECAP will not stand by any company diverging from these set rates, a statement said.

ECAP will not stand with the companies running dual sets of rates or avoiding receipting, it added.

May 15, 2019
Stock market gains 406 points on amnesty scheme launching

KARACHI: The stock exchange gained 406 points on Wednesday owing to introduction of tax amnesty scheme by the government for undeclared assets.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 34,291 points as against 33,885 points showing an increase of 406 points.

Analysts at Arif Habib Limited said that the market made a positive move today, courtesy of Amnesty Scheme as well as news of successful drilling at Kekra 1.

Resultantly, E&P scrips performed well and Investors in general took positive bets on Fertilizer, Cement, Banks and Steel. Cement sector topped the volumes table with 19.4 million shares, followed by Banks (14 million) and Power (11.9 million).

Investors interest in HUBC kept the price up consecutively since yesterday and similar interest was seen in KEL, which also topped the volumes. OGDC, PPL and POL nonetheless, became the star performers today.

Sectors contributing to the performance include E&P (+208 points), Power (+62 points), Fertilizer (+55 points), O&GMCs (+44 points), Pharma (+23 points), Food (-37 points) Banks (-18 points).

Volumes increased slightly from 105.7 million shares to 110.9 million shares (+5 percent DoD). Average traded value also increased by 4 percent to reach US$ 31.5 million as against US$ 30.3 million.

Stocks that contributed significantly to the volumes include KEL, MLCF, BOP, OGDC and LOTCHEM, which formed 33 percent of total volumes.

Stocks that contributed positively include PPL (+94 points), POL (+52 points), OGDC (+43 points), HUBC (+42 points) and EFERT (+30 points). Stocks that contributed negatively include NESTLE (-37 points), HBL (-26 points), MCB (-13 points), DGKC (-10 points) and ICI (-6 points).

May 15, 2019
Rupee remains unchanged against dollar

In Karachi on Wednesday, the Pakistani Rupee showcased resilience against the US Dollar, maintaining its stability in the interbank foreign exchange market. The exchange rate remained unchanged at Rs141.40, echoing the rate observed on the preceding day.
(more…)

May 15, 2019
Offshore drilling for hydrocarbons near Karachi coast completes; samples sent for lab test

KARACHI: The offshore drilling near Karachi coast has been completed. The operators have found hydrocarbons and sent for laboratory test. The operators are hopeful of huge deposits of hydrocarbons, sources said on Wednesday.

Offshore drilling, through a joint venture of four oil giants, near Karachi coast on Indus G-Block (Kekra-1) has been completed after four months.

The process spudded the Kekra-1 well to the depth of 5,450 meters.

A joint venture of ExxonMobil, ENI, Oil and Gas Development Company, and Pakistan Petroleum Limited are conducting the drill stem test (DST) to determine the real size of the oil and gas reserves in the Kekra-1 well, located around 280 km away from Karachi.

The sources said that the samples had been sent for laboratory tests. On the positive results the country would have one of the huge deposits in the world.

Pakistan’s import bill could be decreased by billions of dollars annually, if the total reservoir quantity is huge.

The group of multinational companies had begun offshore drilling on 11th January 2019. The drilling was expected to be completed in March 2019 as per initial estimation. ENI ensured the completion of offshore drilling despite critical situations faced during the drilling process.

May 15, 2019
PTBA recommends outsourcing potential taxpayers profiling to data mining company

KARACHI: Pakistan Tax Bar Association (PTBA) has suggested the Federal Board of Revenue (FBR) to outsource the preparation of profiling potential taxpayers to a data mining company for broadening of tax base.

The PTBA in its tax proposals for budget 2019/2020 suggested the tax machinery that the assignment of preparation of profile of potential taxpayers/registered person be out sourced to a data mining company in line with the responsibility of collection of tax on capital gains given to the National Clearing Company of Pakistan.

“This company should only be allowed to collect the following information and present the potential taxpayer’s profile to the FBR’s BTB department to take appropriate action in accordance with law.”

The PTBA said that Pakistan was facing a challenge with regards to the widening of the current tax base to prevent tax-revenue erosion.

Although in the current year number of Active Taxpayer has improved; however since many years, Pakistan’s registered tax base has been more or less stable at less than 1 percent of the total population.

Over the last few years, the concept of filers and non-filers has been introduced in order to encourage increased filing of returns of income.

However, such amendments have not been able to increase the tax base by many folds as envisaged.

On the other hand has increased the burden of withholding agents by prescribing different withholding rates based on the Active Taxpayers List without achieving any significant progress inroads on the actual tax compliance rates.

In reality bulk of the increased cost due to higher tax rates for non-filer, has been passed on by the unregistered persons to the end consumer by enhancing cost of goods /services to gross up the impact of higher withholding.

The PTBA also proposed that a new team comprising of young IT expert, Accountants and Tax experts should be hired for BTB department.

A task force comprising of independent professionals and top officials be formed to monitor the work assigned to the data mining company and ensure that the BTB department operates efficiently and effectively to ensure the progress in broadening of tax base activity by FBR.

The effective enforcement should be made in accordance with Section 114 of the ITO. The government and FBR on its part should ensure that the relevant provisions of law are implemented in letter and spirit without any distinction on the basis of cast, creed, color and clout to achieve the goal of broadening the tax base.

A complete profile consisting of CNIC, Firm/Company registration-wise of the taxpayer may be prepared generated by maintaining a data base of all the:-

Owners and holders/allottee of the industrial, commercial, residential and agriculture properties;

Private motor vehicles;

Club membership;

International traveling;

Utilities;

credit cards;

investment in bank deposits;

Investment in national saving schemes;

investments in Capital Market; and

Major expenditure (i.e. Rs.300,000/- & above) incurred on account of hospitalization, parties at hotels and schooling of dependents.

Submission of quarterly statements by the Registrars & Housing Societies for registration/transfer of Immovable Property (Industrial Commercial, Residential & Agricultural), Motor Vehicle Registration Authorities, Clubs (Private & Public), Credit Card issuing authorities, Central Depository Company, National Clearing Company of Pakistan, large scale private hospitals, hotels & schools and Financial Institutions distributing profit more than statutory taxable limit or granted commercial loans, should be made mandatory.

Jurisdiction other than Company should, for some time, be reverted strictly to geographical basis to avoid duplication and slippages of potential tax filers.

Tax credit at the rate of 5% be restored and provided to those taxpayers whose 90% Sales and Purchase of Goods are from persons who are registered as Sales Tax and Income Tax taxpayers.

The PTBA said that the proposed amendments would result in increased visibility of potential taxpayers and incentivize registration with the tax authorities without increasing the burden on existing taxpayers.

May 15, 2019
Amnesty Scheme 2019 unveiled; 4pc tax for documenting hidden assets; applicable till June 30

ISLAMABAD: The federal government finally announced tax amnesty scheme 2019 for people having undisclosed assets to become part of documented economy. The scheme has been announced at four percent of tax to declared hidden assets other than immovable properties.

The scheme is available for Pakistani citizens who have evaded taxes other than public office holders.

The scheme will be applicable till June 30, 2019, Advisor to Prime Minister Finance, Dr Abdul Hafeez Shaikh said at a press conference while announcing the scheme after its formal approval by the federal cabinet on Tuesday.

The advisor was accompanied by Special Assistant to the Prime Minister on Information and Broadcasting, Dr Firdous Ashiq Awan, State Minister for Revenues, Hammad Azhar and Federal Board of Revenue Chairman Syed Shabbar Zaidi.

“Basic purpose of the scheme is not to generate revenue but to document economy and make the dead assets functional to promote economy,” Shaikh said.

The advisor urged the business community to participate in this amnesty scheme to document their concealed assets.

Inviting all such people who had their undeclared assets to take benefit from this scheme, the Advisor said this was the last chance as the government had already imposed the Benami Law under which all such benami properties would be confiscated by the government.

He said efforts have been made to make the scheme easy in understanding as well as implementing.

He said all assets were included in the scheme inside or outside Pakistan. All assets other than real estate, would have to pay four percent to get these legalized.

In case of real estate, it would be evaluated at 1.5-time on existing FBR value, to bring it to market value he said.

For Pakistanis living abroad, the advisor said that they can pay four percent to legalize their money subject to bringing cash or other kind into Pakistan.

Otherwise they would have to pay 6 percent to legalize their assets, he added.

Minister of State for Revenue Hammad Azhar said there was a lot of difference between the current and previous amnesty schemes as for the first time there was a condition for all asset declarer to become tax filer besides giving option to all such people to revise their balance sheet in their tax returns.

May 15, 2019