SBP issues draft procedures for payment of duty, taxes under Tax Amnesty Scheme 2019

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 Address: I.I. CHUNDRIGAR ROAD, KARACHI, PAKISTAN

Beneficiary Customer’s SWIFT Code: NBPAPKKAXXX

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 Address: I.I. CHUNDRIGAR ROAD, KARACHI, PAKISTAN

Beneficiary Customer’s SWIFT Code: NBPAPKKAXXX

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.

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