Section 192B of Income Tax Ordinance, 2001, updated up to June 30, 2021, now prescribes severe penalties, including imprisonment for up to three years, for individuals who fail to declare offshore assets or provide inaccurate particulars.
The amendments, incorporated through the Finance Act, 2021, are designed to strengthen the enforcement of tax laws and discourage the concealment of significant offshore wealth.
The revised Section 192B reads: “Prosecution for concealment of an offshore asset.- (1) Any person who fails to declare an offshore asset to the Commissioner or furnished inaccurate particulars of an offshore asset and revenue impact of such concealment or furnishing of inaccurate particulars is ten million rupees or more shall commit an offence punishable on conviction with imprisonment up to three years or with a fine up to five hundred thousand Rupees or both.”
This amendment directly addresses the issue of individuals concealing substantial offshore assets, aiming to ensure greater accountability and fairness in the tax system. It outlines that anyone failing to declare offshore assets or providing inaccurate information about such assets, where the revenue impact is ten million rupees or more, will face severe consequences.
The penalties introduced under Section 192B are stringent, reflecting the gravity of concealing offshore assets. Offenders may face imprisonment for up to three years, a fine of up to five hundred thousand rupees, or a combination of both upon conviction. This marks a significant shift in the approach to dealing with individuals attempting to hide substantial wealth outside the country.
The amendment aligns with global efforts to combat tax evasion, especially concerning offshore assets. Many countries have strengthened their legal frameworks to ensure that individuals disclose their offshore holdings accurately, promoting transparency and fairness in tax systems.
Industry experts have lauded this move, emphasizing its potential to deter individuals from hiding significant offshore assets. The increased penalties send a strong signal that the authorities are serious about tackling tax evasion, particularly when it involves substantial wealth kept offshore.
The amendment to Section 192B of the Income Tax Ordinance, 2001, introducing stricter penalties for the concealment of undeclared offshore assets, underscores the commitment of the FBR to fortify the tax system. This change is anticipated to act as a significant deterrent against individuals attempting to hide substantial offshore wealth, contributing to a more transparent and equitable tax administration system in Pakistan.
