FBR raises Rs36bln in revenue under tax amnesty scheme

KARACHI: The Federal Board of Revenue (FBR) has so far received Rs36 billion in tax revenue under the amnesty program for undeclared local and foreign assets, officials said on Monday, but people having development knowledge said the tweaks in the eligibility criterion for the taxpayers may constrain the inflows as the scheme's last date is fast approaching.

Officials said the FBR managed to realise Rs36 billion in tax amount till Monday’s evening under the tax amnesty scheme for local and foreign assets. Individuals generated payment slip IDs of Rs22 billion, while the FBR already realised Rs14 billion in revenues from the taxpayers. In April, the government unveiled the tax amnesty scheme to give one-time opportunity to individuals to get their undeclared local and foreign liquid or illiquid assets registered through paying two to five percent penalty. The scheme is expiring on June 30.

Tax officials said business community has shown much interest as the businessmen filed a majority of the declarations.

Tariq Mahmood Pasha, chairman of the FBR, during several meetings with the business community, said the amnesty is not for the money or assets generated through proceeds of crime or corruption. The amnesty scheme would become invalid if law enforcement agencies found that the declared money is generated through illegal sources.

Yet, officials, privy to the development, said changes introduced by the FBR related to exchange rate and income period may discourage prospective taxpayers.

A member of Tax Reforms Implementation Committee (TRIC), constituted to bring in upgrades in the system, said Finance Minister Shamshad Akhtar held a meeting with the TRIC’s members last Tuesday and advised them to assist the FBR to make people aware of the tax amnesty.

The member, requesting anonymity, said the TRIC drafted a list of 51 frequently asked questions (FAQs) to explain technical issues related to the scheme. The FBR posted the FAQs on its website on June 21.

“However, FBR increased the number of FAQs and (re)posted (them) on its website on Saturday, June 23,” the TRIC’s member said. “This addition and clarification created panic amongst people who already availed the amnesty as well as prospective declarants.”

In one FAQ, the FBR denied individuals who earned income between July 1, 2017 and April 9 rights of availing the amnesty. “(As) this income would fall in tax year 2018 and income tax return for the tax year 2018 is not due by the commencement date of the Act (Foreign Assets Declaration and Repatriation Act 2018 and the Voluntary Declaration of Domestic Assets Act 2018) or the last date of applicability of the scheme.”

The TRIC’s member said the amnesty would be of ‘no use’ if such individuals are not allowed to declare hidden assets. FBR, in another FAQ, said the noncash asset valuation is determined on the filing date under Foreign Assets Declaration and Repatriation Act, 2018.

“According to section 9 of the Act, the SBP exchange rate of the date of filing declaration needs to be used for determining the rupee value of the apartment,” it said.

The TRIC member said the valuation clarification, at the time when the amnesty scheme deadline is fast approaching, also created panic among people about short payment. “This will also discourage the prospective declarants.”

Mufassir Ata Malik, president of Karachi Chamber of Commerce and Industry said the changes will have negative fallouts for the amnesty scheme as they “will erode the trust of people who just started availing (it) after waiting for more than a month”.

Meanwhile, tax practitioners, who are assisting people in declarations, said the FBR’s online portal is not smoothly working.

“We are facing irritants in filing declarations on the portal,” Zeeshan Merchant, president of Karachi Tax Bar Association said. The FBR, however, denied the downtime reports.