Federal cabinet okays third tax amnesty

ISLAMABAD: The federal cabinet Tuesday formally approved a summary moved by the finance ministry, paving the way to promulgate an ordinance to offer a third tax amnesty scheme to industrialists.

The finance ministry circulated a summary among the federal cabinet members on Monday for their approval of the scheme through the Income Tax Amendment Ordinance 2022.

Under the amnesty, the government will allow industrialists to whiten their black money at a 5% rate by investing in the manufacturing sector.

According to details, the government has decided to offer a 5% across-the-board tax rate and immunity to investors from the investigation about sources of investment.

An investor will establish a new industrial unit through the creation of a new company to avail of the tax amnesty scheme.

Similarly, existing units can also avail the facility for balancing and modernisation.

The cut-off date for availing of the amnesty scheme will be December 2022 with the condition of starting the commercial production in the new unit by June 2024, according to the decision.

Meanwhile, the government has decided that those companies returning a net loss in the last three years will be eligible to be acquired by healthy profit-making companies, which will be incentivised to adjust the sick company’s tax losses for the next three years.