Islamabad, February 4, 2025 – A high-level task force established by Prime Minister Mohammad Shehbaz Sharif has put forward significant recommendations aimed at revitalizing the real estate sector by introducing an amnesty on property transactions.
(more…)Tag: amnesty scheme
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New amnesty for property transactions in Pakistan?
Is Pakistan on the verge of introducing a new amnesty for property transactions, exempting buyers from disclosing their income sources?
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FBR Debunks Rumors of Amnesty for Smuggled Vehicles
Islamabad, August 27, 2024 – The Federal Board of Revenue (FBR) has firmly denied reports circulating in the media regarding an amnesty scheme for smuggled vehicles.
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FBR Initiates Action Against Builders for Missed Deadlines Under Amnesty Schemes
Karachi, October 2, 2023 – The Federal Board of Revenue (FBR) has taken decisive action against property builders and developers who failed to meet project completion deadlines set under the amnesty scheme.
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Amnesty scheme proposal for enhancing dollars inflow rejected
The federal government has firmly rejected a proposal for an amnesty scheme aimed at bolstering the inflow of dollars into the country.
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FPCCI suggests amnesty for cryptocurrency declaration
KARACHI: Federation of Pakistan Chamber of Commerce and Industry (FPCCI) has recommended the government to launch an amnesty scheme of asset declaration for cryptocurrencies.
The FPCCI, which is the apex trade body of the country, in a letter to Prime Minister Shahbaz Sharif suggested measures to improve foreign exchange reserves.
READ MORE: FPCCI protests over advisory council formation
It said: “Investments in cryptocurrencies started with speculative gaming but in recent years have grown into humongous sizes. It is imperative for government authorities to first launch a one-time asset declaration scheme and devise a regulatory framework for future transactions.”
Capital gain taxes, similar to stock market investments, should also be introduced which will provide an additional source of tax revenues for the country.
READ MORE: FPCCI demands reducing income tax slabs to five
The FPCCI suggested a mechanism for the proposed amnesty scheme, which included:
i. Encashment of cryptocurrencies in Pakistan and converting the foreign exchange into the Pakistani rupee may be allowed with no tax.
ii. Encashment of cryptocurrencies in Pakistan and held as deposits in foreign exchange accounts Pakistan may be allowed with a 5 per cent tax.
iii. Encashment of cryptocurrencies in Pakistan and held as deposits in Roshan Digital accounts may be allowed with 10 per cent tax for non-resident Pakistani nationals/dual nationals.
READ MORE: Tax slabs reduction may be considered: FBR chairman
The apex trade body also advised the government to launch amnesty scheme to deposit dollars in local banks.
It said that Pakistan’s total foreign exchange reserves have been depleting significantly since December 2021.
The liquid forex reserves have reached the lowest level of US$ 17.01 billion in April 2022 since June 2020 (on weekly basis).
READ MORE: High interest rate to destroy economy: FPCCI
The reserves held by SBP are only enough to bear the imports bill for only two more months7. Increasing current account deficit and debt repayments (including repayment of the US$ 2.4 billion loan facility given by China) have eroded reserves significantly.
The government should launch an incentive scheme to channelize dollar holdings from lockers and personal safes into bank accounts.
The government may exempt such deposits from any taxes if these have not been declared earlier in tax returns which will be held in local accounts for at least one year.
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IMF should not object to PM relief package: Tarin
ISLAMABAD: Pakistan’s Finance Minister Shaukat Tarin on Wednesday said International Monetary Fund (IMF) should not object to the relief package announced by the prime minister as the country is generating own resources for the package besides increasing the revenue.
The Finance Minister addressing a new conference here said negotiations have been held with the IMF over this relief package announced by the Prime Minister. He said the IMF should not have objections on the package as we are meeting it from our own resources including enhancement in tax revenues. He said this will not increase our fiscal deficit.
READ MORE: PM Imran reduces, freezes POL prices
Finance Minister Shaukat Tarin said the government is providing a subsidy of one hundred and four billion rupees on petroleum products in order to provide relief to the people.
He said given soaring prices of petroleum products in the international market, we have reduced the petroleum levy and brought to zero the sales tax.
Tarin said that those using seven hundred units of electricity per month will be provided with subsidy of five rupees per unit for the next four months. For this, he said, we will have to give a subsidy of 136 billion rupees.
Shaukat Tarin said the government has also given industrial relief package to promote industries in the country. He said the package envisages tax holiday for overseas Pakistanis and incentives for the turnaround of sick industries.
READ MORE: Businessmen hope $5bn investment under PM package
The Finance Minister said tax exemptions have also been given to the IT sector in order to significantly bolster its exports. He pointed out that the IT sector grew by forty seven percent last year and currently growing by seventy percent. He said we target one hundred percent growth in this sector during the next year. Shaukat Tarin said our trade deficit has also come down.
Highlights of the press conference:
Petroleum relief: Prior to Prime Minister’s relief package, govt. was bearing Rs 39 billion fortnightly loss through budgeted PL and Sales tax. At that time, levy on petroleum was Rs17.92 per litre and on Diesel, it was Rs13.30 per litre. With the increase in international prices and Prime Minister’s relief Package, the government will further incur loss of Rs 13.9 billion and fortnightly loss will expand to Rs52 billion. Now petroleum levy and sales tax reduced to zero percent (except for petrol Rs1.8 per Litre)
The estimated budget loss in the next four months would be Rs250-300 billion just from petroleum relief with the assumption of $100/bbl weighted average international price.
Electricity relief: Prime Minister announced reduction of Rs. 5 per unit in base rate for four months consecutively. The package will be applicable to all commercial & domestic non-ToU ( non -Time of Use) consumers having monthly consumption up to 700 units, excluding lifeline consumers. Overall relief is estimated at Rs 136 billion.
Industrial package:
READ MORE: Tax amnesty launched for setting up new industrial units
1- Investment in new industrial units and expansion and modernization of existing units. 5 per cent across the board payment of tax for all amount invested Minimum investment threshold is Rs. 50 million.
Industrial unit to be set-up as a company Commercial production to begin by June 30, 2024. Previous beneficiaries of Amnesty Schemes of 2018 and 2019 will not eligible. Bank loan defaulters in last three years will not be eligible.
2- Incentive for Revival of Sick Units
Applicable only to companies. Industrial units facing accumulated losses in continuous 3 years to be treated as sick units.
Acquiring company allowed to adjust losses of the sick units against its income for consecutive three years.
Revival of the sick unit to be completed within three years of acquisition. Incentive for Foreign Investment in Industrial Sector.
3- Incentives for Overseas
Pakistan citizens who are non-resident for five years and resident Pakistani having declared foreign assets are eligible to invest.
One-time tax credit equal to 100 per cent of PKR equivalent of remittance to be availed in 5 years. Investment to be made in a new industrial unit. Commercial production to start by 30th June, 2024. New industrial unit to be a company
IT package:
READ MORE: PM Imran directs implementing incentives for IT industry
• Tax exemption for IT/TES (Information Technology Enabled Services) firms & free lancers for 5 years.
• Reduction in Capital Gain Tax on VC funding into Start ups to zero percent during 5 years.
• In a historic move, PM has directed to allow IT/ITeS(Information Technology Enabled Services) Companies and Freelancers to retain 100 per cent amount of remittances received through proper banking channels, in FCY Accounts, without any compulsion to convert them into PKR.
• Furthermore, there will be no restriction on outward remittances from FCY account for PSEB registered IT Companies and Freelancers.
• Prime Minister has also directed SBP to introduce Financing streams for IT/ITeS sector and Freelancers keeping in view operational architecture and industry needs for these sectors.
• Recommendations of Pakistan Technology Start-up Fund were also approved by the Prime Minister as part of this historic package for the creation of a Public Private Partnership (PPP) venture capital fund. Ignite National Technology Fund will create this Fund through PPP.
READ MORE: ECC approves Ramzan relief package worth Rs8.28 bn
Benefits:
• Bringing internationally parked Foreign Currency to Pakistan.
• Encourage foreign companies to shift business to Pakistan.
• Employment creation and entrepreneurship promotion in the country.
Trade Deficit:
US $ mn November December January February Exports 2901 2765 2614 2808 Imports 7899 7666 6891 5903 Trade deficit 4998 4901 4277 3095
• Significant decline in trade deficit due to significant decline in imports in the month of January & February.
• Compared to 1HFY22, the current account deficit expected to decline in 2HGFY22. Already visible from trade deficit.
• The CAD reported by SBP is higher due to some imports not reflected at PBS data due to sensitive nature but recorded by EAD. Importantly, the import differential is funded.
• It is pertinent to note that trade deficit is lowest since June 2021. This will bring the deficit down significantly.
Inflation:
• February CPI is lower at 12.2 per cent as compared with 13 per cent in January.
• Adjusted with tomatoes prices the February inflation would have been 10.8 per cent YoY basis.
• Similarly, if we adjust the month on month tomatoes prices, the inflation would have been only 0.6 per cent, on month-on-month basis.
• It is pertinent to note that prices are flat since November 2021, month-on-month basis. Dec (-0.02 per cent), January (0.4 per cent) and February (0.6 per cent) adjusted with tomatoes prices.
• Lastly, Core inflation is witnessing a declining trend in February at 7.8 per cent as compared with 8.2 per cent in January.
• Going forward, it is expected that tomatoes prices will experience decline from mid March due to arrival of crop in Punjab. First week prices of Tomatoes have already declined by 27 per cent.
Key Takeaways of OICCI Press Conference:
• 207 Companies have invested $18.5 billion since 2012. They pay one 3rd of our taxes.
• They believe Pakistan is better than 6 out of 10 regional countries in 2021 verses 3 out of 10 in 2019.
• In 2021, 68 per cent expect accelerating growth in their businesses in the next 2-3 years vs only 27 per cent in 2019.
• They want long-term policies to be prepared by the government to help them invest in Pakistan. Moreover, they want further improvement in ease of doing business.
• Given, the significant improvement in business climate, they want to conduct international road shows to showcase the opportunities in Pakistan.
? Sehat Sahulat Program (Beneficiary Satisfaction Based on 3rd Party Feedback Survey)
Satisfaction rate ( per cent) Total Complaints Total Resolved Total Hospital Visits Total Families Enrolled 97 68,767 67,425 3,247,198 27,694,903
• 96 per cent beneficiaries are satisfied with the treatment provided by Sehat Sahulat program.
• 54 per cent beneficiaries are satisfied with the hospital services.
• 97 per cent beneficiaries are satisfied with the hospital staff behavior.
• 98 per cent beneficiaries are satisfied with Sehat Sahulat program staff behavior at hospital.
• 98 per cent beneficiaries were not asked to pay for services during treatment.
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FBR reviews tax incentives to construction industry
ISLAMABAD: Dr. Muhammad Ashfaq Ahmed, Chairman of the Federal Board of Revenue (FBR) on Friday reviewed the progress made on the Prime Minister’s relief package for the construction industry.
Member Inland Revenue (Policy) assisted by Chief IR Policy informed the Chairman that so far 1321 persons have registered themselves through the online system of FBR in 2125 projects.
Out of these registered projects, 1775 are new projects whereas 350 are existing projects. The total declared investment made in these registered projects comes to Rs493 Billion.
PM’s Construction Package was introduced through Tax Laws (Amendment) Ordinance, 2020 on 19th April 2020. The salient features of the package include fixed tax for builders and developers, immunity from probes, and concessions from withholding of taxes.
FBR has provided all the required facilitation to the beneficiaries of the package which includes the establishment of a dedicated web page, a dedicated email to address inquiries, and an online step-by-step guide for the builders and developers.
Besides, a comprehensive set of FAQs for potential buyers and investors was developed which is available on the FBR website. Moreover, wide publicity through media campaigns was also done to maximize the gains of this relief package.
Chairman FBR directed that ease of doing business must be ensured to the registered projects under the PM’s Package for Construction Sector. He further desired that regular updates on the progress be communicated through media on weekly basis.
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FBR allows filing tax amnesty declarations up to Sept 25
ISLAMABAD: Federal Board of Revenue (FBR) on Friday allowed taxpayers to file declarations under amnesty scheme 2019 up to September 25, 2021.
In this regard, the FBR issued Circular No. 6 of 2022 for relaxing in the filing of declaration under Asset Declaration Ordinance, 2019.
The Asset Declaration Ordinance, 2019 was promulgated on May 14, 2019, for payment of tax and declaration of corresponding assets by June 30, 2019. The due date was extended till July 03, 2019.
The FBR received various references from citizen taxpayers whereby it has been conveyed that owing to certain technological impediments, many citizen taxpayers/persons intending to avail the benefit of the Ordinance deposited due tax but could not file their declarations of assets by the due date i.e. July 03, 2019.
Taking cognizing of the hardship caused and to facilitate the aggrieved citizen taxpayers, FBR has decided to allow the filing of declarations for all those citizen taxpayers/persons who deposited tax under the Ordinance within the due date i.e. July 03, 2019, but could not file their declarations due to any reason.
“The system has been enabled for the purpose and all taxpayers can now file their declarations between September 10, 2021, till September 25, 2021.”
The FBR said that this is a special dispensation granted under Section 7 of the Federal Board of Revenue Act, 2007.
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Saigols of KTML disclose availing amnesty scheme
KARACHI: Kohinoor Textile Mills Limited (KTML) on Thursday shared information disclosing that its senior management has avail an amnesty scheme of undeclared foreign assets.
A communication sent to Pakistan Stock Exchange (PSX) stated that the following shareholders of KTML informed that they had made to the Federal Board of Revenue (FBR) declarations of assets acquired/held outside Pakistan in July 2018 under the Foreign Assets (Declaration and Repatriation) Act, 2018 and intimated about their beneficial ownership of KTML.
Following is shareholding detail prior to the declaration by virtue of the Declaration Act:
01. Taufique Sayeed Saigol, Chief Executive Officer/Director, shareholding in KTML is 43,425,059, the percentage of paid up capital is 14.51 per cent.
02. Mrs. Shehla Tariq Saigol, substantial shareholder, shareholding in KTML is 30,377,143, the percentage of paid-up capital is 10.51 per cent.
Further, the above shareholders of KTML are indirectly ultimate beneficial owners in the proportion of 50 per cent each in the following two foreign companies which are also substantial shareholders of KTML as under:
01. Mercury Management Inc., BVI (MMI), substantial shareholder, shareholding in KTML is 73,390,890, percentage of paid-up capital is 24.52 per cent.
02. Hutton Properties Limited, BVI (HPL), substantial shareholder, shareholding in KTML is 49,639,992, percentage of paid-up capital is 16.59 per cent.
Accordingly, it is notified that, pursuant to the Declarations made under the Declaration Act, their aggregate shareholding in KTML is as under:
The shareholding of Taufique Sayeed Saigol, Chief Executive Officer / Director in KTML after including assets declared under amnesty scheme increased to 106,940,503 or percentage of share capital in KTML increased to 35.06 per cent.
Similarly, the shareholding of Mrs. Shehla Tariq saigol, a substantial shareholder in KTML after including assets declared under the amnesty scheme increased to 91,892,587 or percentage of share capita in KTML increased to 30.70 per cent.
The communication sent to the PSX, the company said: “In accordance with the highest legal ethical standards and acting out of abundant caution in a wholly precautionary way, the above-named shareholders have declared their proportionate shares of indirect shareholding ownership held in KTML through MMI and HPL managed by Saim Family Trust, a Settler Reserved Discretionary Trust.”
Assets held and controlled by this Discretionary Trust would only be available to the beneficiaries at the discretion of the trustees, whenever distributed, it added.
“It is clearly stated that such assets are not yet distributed by the Trustees.”