KARACHI: Federal Board of Revenue (FBR) on Saturday issued rules for implementing tax amnesty scheme 2019.
The FBR on May 20, 2019 issued draft rules for inviting comments of stakeholders till May 22 to finalize the rules.
In this regard the FBR today (May 25) issued SRO 578(I)/2019 to issue the rules for Asset Declaration Ordinance, 2019.
Following is the text of the SRO 578(I)/2019:
Rule 1. Short title and commencement.
Sub-Rule (1): These rules may be called the Asset Declaration (Procedure and Conditions) Rules, 2019.
Sub-Rule (2): They shall come into force at once.
Rule 2: Definitions:
Sub-Rule (1): In these rules, unless there is anything repugnant in subject or context:
(a) ‘Ordinance’ means the Asset Declaration Ordinance, 2019; and
(b) ‘Value of assets’ means value as per Section 5 of the Ordinance as on the date of declaration.
Sub-Rule (2): All other words and expressions used but not defined in these rules shall have the same meaning assigned thereto under the Income Tax Ordinance, 2001, the Sales Tax Act, 1990, the Federal Excise Act, 2005, or the Benami Transactions (Prohibition) Act, 2017, the Ordinance and the rules made thereunder.
Rule 3: Manner of filing declaration:
Sub-Rule (1): For the purpose of Section 3 and 5 of the Ordinance, the declaration shall be filed on the form specified for the purpose on the web portal of the Board.
Sub-Rule (2): Where an asset declared by the declarant is only beneficial owned by the declarant or is owned by a Benamidar of the declarant, the name and identification of the legal owner or Benamidar shall also be declared.
Rule 4: Conditions for making declaration:
Sub-Rule (1): For the purpose of incorporation of undisclosed assets and undisclosed expenditure declared under the Ordinance:
(a) where income tax return for tax year 2018 has not been filed, the declarant shall, along with the declaration or such date as extended by the Board, file –
(i) income tax return for the tax year 2018; and
(ii) wealth statement or financial statement, as the case may be, as on June 30, 2018.
(b) where income tax return for tax year 2018 has been filed under the provisions of the Income Tax Ordinance, 2001, the declarant shall, along with the declaration or such date as extended by the board, revise –
(i) income tax return and financial statement for tax year 2018, if the declarant is a company; or
(ii) wealth statement or statement of assets and liabilities, if the declarant is an individual or an association of persons.
Sub-Rule (2): Where a person declares undisclosed sales in terms of Section 3, he shall declare the undisclosed sales subject to the Sales Tax Act, 1990 and the Federal Excise Act, 2005 from July 2014 to June 2018, in the first sales tax and federal excise return, due after the declaration.
Sub-Rule (3): For the purpose of Section 3 and 4 of the Ordinance, in case of payment of tax on foreign assets, –
(a) the fair market value and cost of such assets shall be declared in respective foreign currencies on board’s web portal;
(b) tax shall be paid in foreign currency as per procedure specified by the State Bank of Pakistan; and
(c) in case of tax payment after the June 30, 2019, liability of default surcharge shall be paid in foreign currency as per procedure specified by the State Bank of Pakistan.
Sub-Rule (4): For the purpose of clause (d) of Section 8 of the Ordinance, if such assets represent cash or any other form of foreign exchange bearer assets, the same or its proceeds shall be deposited and retained in a foreign bank account of the declarant till June 30, 2019 and bank statement as evidence thereof, shall be provided by July 30, 2019 or such date as extended by the Board.
Sub-Rule (5): For the purpose of clause (b) of Section 5 of the Ordinance, the value declared by the declarant as the fair value, cost or the price which the assets may ordinarily fetch on sale in the open market on the date of declaration shall be taken to be valid unless there is objective evidence to the contrary available with the Board.
Sub-Rule (6): Where foreign assets are shares of a company incorporated in Pakistan held by the declarant, whether beneficially or otherwise, it may be declared subject to the condition that such shares shall be repatriated into Pakistan with the prior approval of the State Bank of Pakistan and registration of such shares with the State Bank of Pakistan in the name of declarant on non-repatriable basis.
Sub-Rule (7): Where an asset being a receivable from a person is declared, complete particulars of the persons from whom the amount is receivable along with his identification and address shall also be declared.
Rule 5: Payment of tax for original demand:
For the purpose of sub-section (4) of Section 6 of the Ordinance, default surcharge and penalty shall not apply if, –
(a) tax determined by an Officer of Inland Revenue in the original order, is paid up to June 30, 2019; and
(b) such original order or an appellate order passed against such original order has not yet attained finality.
Explanation: An original order passed by an Officer of Inland Revenue or an appellate order passed by an appellate authority shall be taken to be final if no right of appeal has been provided against such orders or no appeal has been filed within the time limit prescribed under the applicable laws against such orders.
Rule 6: Payment of tax under other laws:
For the purpose of Section 4, 12 and 16 of the Ordinance, where the declarant has paid tax under the Ordinance, no tax shall be payable by the declarant under the Income Tax Ordinance, 2001, the Sales Tax Act, 1990 and Federal Excise Act, 2005 in respect of such undisclosed assets, undisclosed expenditure or undisclosed sales.
Rule 7: Revision of declaration:
Any person who having filed a declaration hereinafter referred to as the ‘original declaration’ discovers any omission, mistakes, computational error or wrong statement therein may file revised declaration within the due date specified in Section 3 of the Ordinance subject to the condition that the value of assets and the tax paid thereon shall not be decreased.
(PkRevenue.com takes no responsibility of any error of this text. The text is published in the interest of readers with ensuring no typo error.)
KARACHI: State Bank of Pakistan (SBP) Friday issued draft procedure for payment of duty and taxes against declaration made to avail amnesty scheme.
According to draft text made available to PkRevenue.com, the SBP said that in pursuance of the section 9 of the Asset Declaration Ordinance, 2019 (hereinafter referred to as the “Ordinance”), State Bank of Pakistan (hereinafter abbreviated as SBP) is pleased to notify the procedure for:
a) Method of conversion of value of assets held outside Pakistan in Pak Rupees.
b) Deposit of tax in foreign currency through State Bank of Pakistan; and
c) Repatriation of assets to Pakistan.
2. Short title and commencement:
i. The Procedure may be called Procedure under section (9) of the Asset Declaration Ordinance, 2019; and
ii. It shall be deemed to have come into force from XXth day of May 2019.
3. Method of Conversion of Value of Foreign Currency Denominated Assets in Pak Rupees:
i. The asset held outside Pakistan and foreign currency held in Pakistan shall be converted into PKR at such exchange rates1 as may be notified on daily basis by the SBP to Federal Board of Revenue (FBR) in respect of ten currencies i.e. AED, AUD, CAD, CHF, CNY, EUR, GBP, JPY, SAR, and USD.
ii. If the foreign currency denominated assets are in currencies other than those specified in clause 3(i), the taxpayer shall convert the said currency into PKR by using the following formula:
The arithmetic mean of Weighted Average Customer Exchange Rates (Buying & Selling)
Amount of assets in PKR = A x B x D / C where,
A = Amount of asset in currency other than currencies listed in 3(i) held outside Pakistan;
B = Number of USD per SDR to be taken from IMF website2;
C = Number of currency units in a currency other than those listed in 3(i)) per SDR3; and
D = Exchange Rate of USD with PKR as notified by the SBP under clause 3(i) for the applicable.
Illustration: The taxpayer has assets in Singapore Dollar amounting to 1,000 and files the declaration on May 16, 2019.
The rates from the IMF Website of preceding working day would be available and applicable for conversion.
Hence, the parities of USD, Singapore Dollar with SDR as of May 15, 2019 are 1.382330 and 1.891160 respectively.
Amount of asset in PKR = 1,000 ∗
1.382330∗141.34451.891160 = PKR. 102,881.94
4. Registration and Declaration of Assets and Deposit of Tax Thereon:
i. The taxpayer shall file his/her declaration on FBR Web Portal electronically by disclosing their assets held outside Pakistan, and foreign currency held in Pakistan, in PKR as converted under clause 3.
ii. The system will generate tax liability of the taxpayer in PKR by applying the relevant tax rate for each category of disclosed assets. 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 PKR and USD/AED.
iii. The taxpayer will now visit the website: https://paysys.fbr.gov.pk to generate the PSID in PKR and USD/ AED. The sequential number of PSID will be
2 Special Drawing Rights (SDR) rates (Currency Units per SDR) accessible from https://www.imf.org/external/np/fin/data/param_rms_mth.aspx
3 Special Drawing Rights (SDR) rates (Currency Units per SDR) accessible from https://www.imf.org/external/np/fin/data/param_rms_mth.aspx recorded by the taxpayer in his/her own record, besides taking the print thereof.
5. Payment of tax by wire transfer to SBP Account:
a. Payment of tax in US Dollars:
i. After declaration of assets and generation of PSID as described in Para ‘4’ above, the tax liability as reflected in the PSID shall be remitted by wire transfer to the following account:
Receiver’s Correspondent Bank: NATIONAL BANK OF PAKISTAN
Receiving Bank Address: NEW YORK, U.S.A
Receiving Bank SWIFT Code: NBPAUS33
Beneficiary Customer Name: NATIONAL BANK OF PAKISTAN
Beneficiary Customer’s Account No: XXXXXXXX (to be provided by NBP)
Payment Instructions: TRANSFER TO SBP COLLECTION A/C WITH NBP-KO
Taxpayer shall in the SWIFT message, bearing the necessary instructions above shall also include PSID No, CNIC, Date of Birth (DOB), and Place of Birth (POB) of the taxpayer.
ii. After receiving the money, the correspondent Bank will pass on the funds to the NBP-Karachi account maintained with them for collections of the scheme and inform NBP Karachi through SWIFT message.
iii. NBP-Karachi shall, after verifying receipt of the money in its account and necessary screening, access the FBR Portal and enter the PSID from SWIFT message in the system to access his/her details.
Thereafter, the concerned officer shall input the amount so received in the designated field. The system will match the amount received with the amount of PSID; eCPR will be generated if the amount received matches with the PSID amount.
In case of short payment, the system will generate SMS/ email for the taxpayers regarding the short payment. The short payment of up to USD. 100 can be deposited in cash with the designated NBP branches in major cities.
In order to avoid the hassle; the taxpayers should make sure that the amount received in the SBP account with NBP net of correspondent and other bank charges, is equal to or greater than the amount of PSID. The excess amount, if any, shall be credited to a temporary account to be closed after the culmination of the scheme.
iv. NBP – Karachi shall settle the foreign currency proceeds of the issued eCPRs into the Nostro account of SBP with NBP New York on a T+1 basis.
v. NBP- Karachi shall render summary of settlement of eCPRs in respect of which the settlement has been made in SBP Nostro Account. The summary inter-alia shall include the PKR equivalent of amount of liability as per PSID along with its equivalent in foreign currency.
vi. SBP shall credit the government account with the amount of PKR as accumulated through PSIDs and consequential exchange rate differential shall be on SBP account.
b. Payment of tax in UAE Dirham:
i. After declaration of assets and generation of PSID as described in Para ‘5’ above, the taxpayer shall arrange to remit the AED funds against the tax liability as reflected in the PSID and Form ‘A’ to SBP through official normal banking channels in the following SBP account:
Receiver’s Correspondent Bank: UNITED BANK LIMITED
Receiving Bank Address: ABU DHABI, UAE
Receiving Bank SWIFT Code: UNILAEAD
Beneficiary Customer Name: NATIONAL BANK OF PAKISTAN
Beneficiary Customer’s Account No: XXXXXXXX (to be provided by NBP)
Payment Instructions: TRANSFER TO SBP COLLECTION A/C WITH NBP-KO
Taxpayer shall in the wire transfer, or SWIFT message, bearing the necessary instructions shall also include PSID No, CNIC, Date of Birth (DOB), and Place of Birth (POB) of the taxpayer.
ii. After receiving the money, the correspondent bank will pass on the funds to the NBP-Karachi account maintained with them for collections of the scheme and inform NBP Karachi through SWIFT message
iii. NBP-Karachi shall, after verifying receipt of the money in its account, access the FBR Portal and enter the PSID no from SWIFT message in the system to access his/her details.
Thereafter, the concerned officer shall input the amount so received in a designated field. The system will match the amount received with the amount of PSID; eCPR will be generated if the amount received matches with the PSID amount.
In case of short payment, the system will generate SMS/ email to the taxpayers regarding the short payment. The short payment of equivalent to up to USD 100 can be deposited in cash with the designated NBP branches in major cities.
In order to avoid the hassle; the taxpayers should make sure that the amount received in the SBP account with NBP net of correspondent and other bank charges, is equal to or greater than the amount of PSID.
The excess amount, if any, shall be credited to a temporary account to be closed after the culmination of the scheme.
iv. NBP – Karachi shall settle the foreign proceeds into the Nostro account of SBP with UBL – Abu Dhabi on a T+1 basis.
v. NBP- Karachi shall render a summary of settlement of eCPRs in respect of which the settlement has been made in SBP Nostro Account. The summary inter-alia shall include the PKR equivalent of amount of liability as per PSID along with its equivalent in foreign currency.
vi. SBP shall credit the government account with the amount of PKR as accumulated through PSIDs and consequential exchange rate differential shall be on SBP account.
6. Payment of Tax of Foreign Currency Held in Pakistan:
i. The following assets shall be included in the foreign currency held in Pakistan:
• Cash held by the declarant which is deposited into a bank account in the manner prescribed by the section 8(a) of the assets declaration ordinance 2019;
• Foreign Currency held in declarants own foreign currency bank account and retained in the said account in accordance with the provisions of Section 8(b) of the assets declaration ordinance 2019; and
• Face Value of the amount invested in Pakistan Banao Certificates (PBCs).
ii. The aforesaid assets shall be converted into Pak Rupee in accordance with the procedure given in Clause 3 above. The PKR value so computed shall be declared in Form-A along with Bank Name, Branch name and account number.
iii. The taxpayer will then generate a PSID in PKR and USD through https://paysys.fbr.gov.pk; the sequential number of which will be recorded by the taxpayer in his/her own record, besides taking the print thereof.
iv. 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 may request their banker to issue a debit authority in favor of Chief Manager SBPBSC-KO, authorizing to debit the account to the tune of the tax liability. Debit authority must specify the PSID of the taxpayer, so as to enable the generation of eCPR.
7. Repatriation of Assets to Pakistan:
i. Taxpayers intending to repatriate their assets held outside Pakistan shall remit the same to Pakistan through banking channels in declarants’ own in PKR of FCY account in any bank in Pakistan.
ii. The Pakistani bank receiving the repatriated funds shall issue Asset Repatriation Certificate (ARC) which shall include the details such as Name of Remitter, Amount in FCY, and IBAN of taxpayer. Each ARC shall have a unique reference number, which the taxpayer shall use to report the same to FBR.
iii. The bank shall issue ARC under these rules only in respect of remittances on or after the date of issuance of this procedure.
iv. The declaration filed by the taxpayer shall be accepted by the Portal only after incorporating the following information on the FBR Portal in respect of repatriated assets:
a) Number and Date of Issuance of ARC;
b) Issuing Bank;
c) Address of the Branch maintaining the account of the taxpayer; and
d) IBAN of the account in which the repatriated assets are credited.
v. SBP may either as a part of its regular inspection or through a special inspection may examine the record of all such certificates issued by the bank so as to confirm their accuracy and conformity with underlying record and transaction trail.
KARACHI: Overseas Investors Chamber of Commerce and Industry (OICCI) has recommended the government to eliminate culture of amnesty schemes as such measures encourage tax evaders.
ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday issued Urdu version of presidential ordinance for Tax Amnesty Scheme – 2019.
The FBR said that the Urdu translated version had been issued for the facilitation of people to understand the scheme and participate/avail proactively.
However, the FBR said that the translated version can not be referred anywhere and English version will be treated as authentic document.
ISLAMABAD: Syed Muhammad Shabbar Zaidi, Chairman, Federal Board of Revenue (FBR) Wednesday warned industrial and commercial consumers of gas and electricity to get registered with sales tax authorities, otherwise penal action will be initiated from July 01, 2019.
Addressing a press conference, he said that currently there were around 341,174 industrial electricity connection and 7000 industrial gas connections, however compared to this the sales tax registration of industry was just 38,937, which he said was a huge gap.
“It is my request to all industrial consumers to take advantage of the scheme before June 30 and may be it (the scheme) do not remain in the same shape after July 1st,” so the people using industrial utility connections should take advantage, the Chairman added.
He said that there were possibilities that these industrial consumer connections might include some connections that come under cotton industry under law, however, added that there was dire need to check this huge difference.
“It would be our desire that under the special clause placed in Asset Declaration Scheme, the industries falling in the category pay two percent to clear past liabilities,” the chairman added.
He said that after July 1st, the FBR would make necessary legislation to get these industries and manufacturers registered and would also take actions.
He urged the industrialists and manufacturers to take advantage of the Asset Declaration Scheme and clear their past sales tax liabilities by paying just two percent tax till June 30, 2019 or the law would take its due course after the expiry of the data.
“A special clause has been included in the Asset Declaration Scheme, which was not included in it earlier, which is that if anybody is having sales tax liability he or she may clear these by paying just two percent tax,” the Chairman FBR, Muhammad Shabbar Zaidi said while addressing a press conference at FBR house here.
He urged the media to sensitize people on the issue so that those avoiding to clear their past sales tax liabilities might realize this gap and get registered with FBR by taking advantage of the Asset Declaration Scheme.
He said that the FBR would try its best to make it voluntary and do not indulge in harassment, as it wanted to create environment for the businesses.
To a question, the FBR Chairman said that there were around 3.1 million commercial consumers, however added that the strategy on how to get the unregistered consumers to get registered with FBR would be shared with media.
To another questions, the Chairman FBR said that there were over one lack companies registered with the Securities and Exchange Commission of Pakistan (SECP), however just 50,000 were filing their returns.
He said that it was high time for those having industrial connections to get registered with FBR and take benefit of the Tax Declaration Scheme.
It is pertinent to mention here that the government last week had announced Asset Declaration Scheme, providing one more opportunity to all Pakistani citizens to declare and legalize undisclosed assets inside and outside the country by paying just four percent taxes on all assets other than real estate.
The scheme would be applicable till June 30, and all Pakistan citizens, other than those holding public offices or their dependents, would be able to take benefit from it.
The basic purpose of the scheme was to document economy and make the dead assets functional to promote economy by encouraging businessmen to participate in the legal economy.
KARACHI: Sindh Revenue Board (SRB) on Monday launched an amnesty scheme to exempt penalty amount on payable as sales tax on services.
However, concession has been granted on the payment of default surcharge.
The SRB issued notification stating that the provincial revenue board had exempted the whole of the amount of penalty and such of the amount of default surcharge as is in excess of the amount of default surcharge, provided that the principal amount of the tax and the following amount of the default surcharge thereon are deposited during the periods as specified below:
(a) the principal amount of tax (as outstanding on May 21, 2019) along with 5 percent of the amount of default surcharge thereon if deposited during the period from May 21, 2019 to May 27, 2019.
(b) the principal amount of tax (as outstanding on May 21, 2019) along with 10 percent of the amount of default surcharge thereon if deposited during the period from May 28, 2019 to June 03, 2019.
(c) the principal amount of tax (as outstanding on May 21, 2019) along with 15 percent of the amount of default surcharge thereon if deposited during the period from June 04, 2019 to June 10, 2019.
(d) the principal amount of tax (as outstanding on May 21, 2019) along with 20 percent of the amount of default surcharge thereon if deposited during the period from June 11, 2019 to June 20, 2019.
(e) the principal amount of tax (as outstanding on May 21, 2019) along with 25 percent of the amount of default surcharge thereon if deposited during the period from June 21, 2019 to June 30, 2019.
The SRB said that the word ‘deposited’, used in the notification, means deposited by means of the Computerized Payment Receipt (CPR) so generated.
The SRB further said that benefits of exemption of penalty and default surcharge, as specified in the notification, shall also be available in relation to the arrears of the tax (so outstanding on the May 21, 2019) payable under Sindh Sales Tax Ordinance, 2000 and under the Sindh Sales Tax on Services Act, 2011 by:
(i) persons who are liable to be registered under Section 24 of the Act but were not registered, provided that:
(a) they get themselves registered with SRB in the prescribed manner during the aforementioned periods from May 20, 2019 to June 30, 2019;
(b) they deposited their tax liabilities for the principal amount of tax along with the aforementioned percentage of the amount of default surcharge thereon in relation to the tax periods from the date of the commencement of their economic activity to the tax period of May 2019;
(c) they also e-file their tax returns, for the tax periods from date of commencement of their economic activity of taxable services to the tax period May 2019 during the period from the date of this notification to June 30, 2019.
Explanation: For the purpose of word ‘registered’ in the case of withholding agents shall mean ‘e-signed up’ in terms of Sindh Sales Tax Special Procedure (Withholding) Rules, 2014;
(ii) persons who were registered but were non-filers or null-filers or nil-filers of their tax returns;
(iii) persons who were late-registered with SRB and they did not file all of their tax returns for the tax periods from the date of commencement of their economic activity of taxable services;
(iv) persons who withheld any amount of Sindh sales tax but have either not deposited that withheld amount in provincial government account or have deposited the withheld amount in a head of account other that the Sindh government’s head of account.
(v) persons who determine the arrears through self-detection and self-assessment;
(vi) persons who short-paid any amount of tax in their tax returns and persons against whom any arrears of tax was detected in SRB’s scrutiny of tax returns or in SRB’s audit of taxpayers’ record;
(vii) persons against whom any tax amount has been determined or assessed or adjudged, by an officer of the SRB, through an order or decision passed under the Sindh Sales Tax on Services Act, 2011, or the rules/notification issued thereunder;
(viii) persons against whom any tax liability has been adjudged or confirmed by the Commissioner (Appeals) or the Appellate Tribunal;
(ix) persons whose cases are under assessment or under adjudication with any officer of the SRB or are pending, at the appellate stage with the Commissioner (Appeals) or with the Appellate Tribunal; and
(x) persons whose cases are under litigation in any court of law including the High Court or the Supreme Court.
The SRB said that the benefits of this notification, to the extent as specified below, shall also be available in case where a person has late paid the principal amount of tax prior to the date of this notification and/ or has not yet discharged the liability of penalty (whether the prescribed amount or the adjudged amount of the penalty) and the default surcharge on such late payment provided that he pays an amount equal to:
(a) 5 percent of such amount of penalty and 15 percent of such amount of default surcharge (as outstanding on May 21, 2019) in provincial government account during the period from May 21, 2019 to June 3, 2019;
(b) 10 percent of such amount of penalty and 20 percent of such amount of default surcharge (as outstanding on May 21, 2019) in provincial government account during the period from June 04, 2019 to June 20, 2019; and
(c) 15 percent of such amount of penalty and 25 percent of such amount of default surcharge (as outstanding on May 21, 2019) in provincial government account during the period from June 20 21, 2019 to June 30, 2019.
The SRB said that if the whole of the dues of the principal amount of tax and the aforementioned prescribed percentage of the amount of default surcharge thereon are paid by a person in terms of this notification, he shall not be prosecuted under Section 49 of the Act and the offence, to the extend of the arrears of the tax paid under this notification, shall also be compounded under Section 46 of the Act.
The SRB further said that if the principal amount of the tax and the aforementioned percentage of the amount of the default surcharge thereon, as are paid in terms of this notification by the persons in clauses (vi) (vii) (viii) (ix) and (x) of paragraph 2 of the notification, are held to be not payable in view of the order issued by the respective competent authority (i.e. the adjudicating officer or the commissioner appeals or the appellate tribunal or the court of law), the officer of the SRB, not below the rank of an assistant commissioner, shall allow tax adjustment/credit of the amount or alternately, shall refund the amount, so paid, within 90 days from the date of receipt of the taxpayer’s application, for refund or for tax adjustment/credit, together with a copy of the order/judgment and also of the evidence that the incidence of the tax was not passed on to the service recipient.
The SRB further said that the notification would not apply for refund or adjustment of any amount of tax or default surcharge or penalty as has already been paid or recovered on any date prior to May 21, 2019.
ISLAMABAD: Federal Board of Revenue (FBR) on Monday notified draft rules to implement tax amnesty scheme 2019. The FBR invited comments or objections on the rules by May 22, 2019.
According to the draft rules, the FBR notified following conditions for making declaration for foreign and domestic declaration:
(1) For the purpose of incorporation of undisclosed assets and undisclosed expenditure declared under the Ordinance (asset declaration):
(a) where income tax return for tax year 2018 has not been filed, the declarant shall, along with the declaration or such date as extended by the board [FBR], file
(i) income tax return for the tax year 2018; and
(ii) wealth statement or financial statement, as the case may be as on June 30, 2018.
(b) Where income return for tax year 2018 has been filed under the provisions of the Income Tax Ordinance, 2001, the declarant shall, along with the declaration or such date as extended by the board, revise –
(i) income tax return and financial statement filed for tax year 2018, if declarant is a company; or
(ii) wealth statement, if the declarant is an individual or an association of persons.
(2) Where as person declares undisclosed sales in terms of Section 3, he shall declare the undisclosed sales subject to the Sales Tax Act, 1990 and the Federal Excise Act, 2005 from July 2014 to June 2018, in the first sales tax and federal excise return, due after the declaration.
(3) For the purpose of section 3 and 4 of the ordinance, in case of payment of tax of foreign assets –
(a) the value of such assets shall be declared in respective foreign currency on Board’s website portal;
(b) tax shall be paid in foreign currency as per procedure specified by the State Bank of Pakistan at the rate specified under the Ordinance; and
(c) in case of tax payment after June 30, 2019 liability of tax and default surcharge shall be paid in foreign currency as per procedure specified by the SBP and will be calculated in Pak Rupee at an exchange rate prevailing on the date of payment.
(4) For the purpose of clause (d) of Section 8 of the Ordinance, in case of foreign assets not being repatriated into Pakistan, if such assets represent cash or any other bearer assets, the same or its proceeds shall be deposited and retained in a foreign bank account of the declarant till June 30, 2019 and bank statement as evidence thereof, shall be provided by July 30, 2019 or such date as extended by the Board.
(5) Payment of tax for original demand:
For the purpose of sub-section (4) of Section 6 of the Ordinance, default surcharge and penalty shall not apply if, –
(a) tax determined by an officer of Inland Revenue in the original order, is paid up to June 30, 2019;
(b) such original order or an appellate order passed against such original order has not yet attained finality.
Explanation: An original order passed by and officer of Inland Revenue or an appellate order passed by an appellate authority shall be taken to be final if no right of appeal has been provided against such orders or no appeal has been filed within the time limit prescribed under the applicable laws against such orders.
(6) Payment of tax under other laws:
For the purpose of Section 4, 12 and 16 of the Ordinance, where the declarant has paid tax under the Ordinance, no tax shall be payable by the declarant under the Income Tax Ordinance, 2001, the Sales Tax Act, 1990 and Federal Excise Act, 2005 in respect of such undisclosed assets, undisclosed expenditure or undisclosed sales.
(7) Revision of declaration:
Any person who having filed a declaration hereinafter referred to as the ‘original declaration’ discovers any omission, mistakes, computational error or wrong statement therein may file revised declaration within the due date specified in Section 3 of the Ordinance subject to the condition that the value of assets and the tax paid thereon shall not be decreased.
KARACHI: The members of Federation of Pakistan Chambers and Commerce of Industry (FPCCI) have unanimously declared the recently announced tax amnesty by the present government is step in right direction.
The FPCCI held an emergent meeting of its members at its head office Karachi on Saturday under the chairmanship of Abdul Rauf Mukhtar, Acting President of FPCCI and reviewed/discussed the new tax amnesty scheme namely “Asset Declaration Scheme 2019” as announced by the PTI government which has come in to effect through a Presidential Ordinance.
The meeting was attended by S.M. Muneer, leader of the Business Community and Former President of FPCCI; Dr. Mirza Ikhtiar Baig, Sr. Vice Presidents; Vice Presidents FPCCI Arshad Jamal, Muslim Muhammadi, Waqar Mehmood Khan and Noor Ahmed Khan, Zubair Tufail, Former President FPCCI, Former Sr. Vice Presidents FPCCI Khalid Tawab, Syed Mazhar Ali Nasir and Aamer Ata Bajwa, Former Vice Presidents Hanif Gohar, Shakil Dhingra, Akbar Abdullah and other representatives of trade and industry.
FPCCI acting president Abdul Rauf Mukhtar termed the scheme as a right step in the right direction with the objective to bring the tax evaders under the tax net, enhancing the country’s revenue base, documentation of economy, curtailing the size of ever increasing black economy and to bring dead assets in the mainstream of economy and make them functional.
He also urged the government to ensure complete secrecy and confidentiality of the declarants’ data to enhance the confidence of tax payers in the scheme- a pre-requisite for success for any scheme.
Highlighting salient features of the scheme, the FPCCI Acting President informed, “The rates of tax imposed on undisclosed assets, sales and expenditures would be 4 percent on all assets; rate of tax would be 1.5 percent on domestic immovable properties; rates of tax would be 6 percent on foreign liquid assets not repatriated; rate of tax would be 4 percent on unexplained expenditure and rate of tax would be 2 percent on undisclosed sales.”
The participants termed the 4 percent tax rate as attractive for legalisation of black money held in the form of expenditures, sales and assets including foreign assets; however, they said that duration of the scheme is relatively less as the scheme would offer a period of 45 days to people for declaration of their undeclared assets along with payment of taxes until June 30, 2019.
They added that the PTI government announced its first tax amnesty scheme for whitening of undisclosed expenditures, sales and assets including foreign assets at nominal tax rates and were of the unanimous opinion that the time period of the scheme should be extended beyond June 30, 2019 up to December 31, 2019.
They appreciated the FBR’s move to issue the scheme in Urdu language as well as in simplified declaration form.
They were of the opinion that legalization of undeclared assets at 4 percent is very attractive although the rates are comparatively higher as compared to last amnesty scheme.
They added for the first time lucrative rate of 1.5 percent has been offered for real estate sector.
They, referring to the size of the parallel economy were of the opinion that resolution of real state and bearer instruments issues were necessary to clip the wings of grey economy otherwise these would be surfacing periodically in future and the government would have to offer amnesty scheme again and again.
They also lauded government efforts to broadening the tax base and enhance tax to GDP ratio as it was one of the lowest in the world.
The participants were of the opinion that this time the scope of the scheme would be for those avenues which were not covered in earlier ones like sales tax and benami assets especially benami bank accounts.
The members urged the government to publicize the scheme rigorously because that one may who may not be aware the penalties associated with it for not availing the scheme, including confiscation and imprisonment, and that this is the very last chance to avail it.
They also proposed that the limit of Rs5 million for gold jewelry be withdrawn and the condition of depositing cash in hand in bank to avail the scheme be also removed.
KARACHI: The government has allowed whitening of money investment in immovable properties at nominal income tax rate of 1.5 percent on declaration made by June 30, 2019.
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);
(c) “court of law” means a High Court or Supreme Court of Pakistan;
(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.
(c) Undisclosed expenditure incurred up to 30th June, 2018; or
(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
(c) Method of conversion of value of assets held outside Pakistan in Pak rupees.
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;
(c) Any proceeds or assets that are involved in or derived from the commission of a criminal offence;
(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
