ISLAMABAD: Federal Board of Revenue (FBR) will question the sources for all those foreign remittances exceeding Rs5 million in a year, which are transferred through normal banking channels.
The government has tightened the unexplained inflows by making amendment to Income Tax Ordinance, 2001 through Finance Act, 2019.
In the past the inflows of foreign remittances were free from questioning by the tax authorities and recipient in Pakistan were allowed to get the amount into their bank accounts.
However, through Finance Act, 2018 the limit was introduced to Rs10 million received as foreign remittances and no question would be asked to any amount of foreign exchange remitted from outside Pakistan through normal banking channels that is encashed into rupees by a scheduled bank and a certificate from such bank is produced to that effect.
This limit has been further reduced to Rs5 million through Finance Act, 2019 and now from July 01, 2019 the inflows would be monitored and FBR has been authorized to ask a persons receiving above Rs5 million in a year about the source of sender of the amount from outside.
The relaxation for no questioning was allowed since 2004 and it was grossly misused as it had provided legal channel for bringing back untaxed money into Pakistan without questioning by the authorities.
For the past several years tax authorities as well as stakeholders appealed the government to abolish this permanent amnesty or put condition that the remittances without question should only be received by relatives of the sender.