PTI govt unveils tax amnesty scheme

PM’s aide Hafeez Shaikh says undisclosed assets may be legalised by paying 4pc tax; real estate will be assessed at 1.5 times more than FBR-assigned value; every Pakistani, except for public office holders, can benefit from Asset Declaration Scheme; the scheme will be available till June 30; in terms of cash, money have to be deposited in Pakistani banks, or else 6pc have to be paid to get assets legalised

ISLAMABAD: The Pakistan Tehrik-e-Insaf (PTI) government on Tuesday announced an Asset Declaration Scheme, providing one more opportunity to all Pakistani citizens to declare and legalise undisclosed assets inside and outside the country by paying just four per cent taxes on all assets other than real estate.

The tax amnesty scheme would be applicable till June 30, and all Pakistan citizens, other than those holding public offices or their dependents, would be able to benefit from it, Adviser to Prime Minister on Finance, Dr Abdul Hafeez Shaikh said at a press conference while announcing the scheme.

The tax amnesty scheme was formally approval by the federal cabinet in a meeting chaired by Prime Minister Imran Khan earlier in the day.

Dr Shaikh said the basic purpose of the scheme was not to generate revenue but to document economy and make the dead assets functional to promote economy. He said the philosophy behind the scheme was not to intimidate people, but to encourage businessmen to participate in the legal economy.

The PM’s aide said efforts had been made to make the scheme easy to understand and implement. He said all assets were included in the scheme inside or outside Pakistan. Four per cent would have to be paid on all assets other than real estate to get them legalised.

In case of real estate, it would be evaluated at 1.5 times on FBR value to bring it to market value, he said, citing an example if the FBR value of any property was Rs1 million, it would be charged at the value of Rs1.5 million.

He said the Pakistanis abroad could also pay four per cent to legalise their undisclosed assets, however, added in terms of cash, they would have to deposit their money in Pakistani banks (in local or foreign currency), otherwise, they would have to pay six per cent to legalise their assets.

Dr Shaikh said every Pakistani national was eligible to take benefit from the scheme, except for public office holders and their dependents. Inviting all such people who had their undeclared assets to benefit from the scheme, the adviser said it was the last chance as the government had already imposed Benami law under which all such properties would be confiscated.

Replying to a question, Dr Shaikh said talks between Pakistan and the International Monetary Fund (IMF) continued for around 7-8 months and nothing special was added in the agreement after he joined the office.

“The IMF is an international institution which primarily focuses on bringing the financially weak countries out of financial crisis and the conditions set by the Fund for Pakistan are in its own interest,” he said adding whether it was the condition of shrinking trade deficit, or reducing expenditures and increasing revenues, or selling out the bleeding state own entities, all such conditions were aimed at stabilising the country’s economy.

Replying to a question whether that would be the last programme with the IMF, the adviser said in the past, the governments could not fulfill the conditions of the IMF which resulted in instability of the economy, but now the government was committed to abide by all the conditions and hoped the country would not need to go for another programme. He said the electricity price would be increased for only those consumers who used 300 and above units per month, while the rest of 75 per cent consumers would not be affected by the power tariff raise.

He said in the upcoming budget, the government was raising the budget for the downtrodden segment of the society and allocating Rs 180 billion compared to Rs 100 billion earmarked the previous year.

The adviser said under the Public Sector Development Programme (PSDP) 2019-20, the government would allocate Rs 550-600 billion while in the next year that budget would be increased to over Rs 700 billion which would help generating more new jobs.

He said the revenue performance had not been so good in the past but now the government was taking some basic measures which would help improve the revenue level to record high in coming years.

Minister of State for Revenue Hammad Azhar said there was a lot of difference between the current and previous amnesty schemes as for the first time there was a condition for all asset declarer to become tax filer besides giving option to all such people to revise their balance sheet in their tax returns.

Federal Board of Revenue (FBR) Chairman Syed Shabbar Zaidi said the government had clear business information about the Pakistanis living abroad and at present it possessed information about 150,000 accounts in 28 countries against which the government had started taking action. He also urged the media to become partner in the scheme and play role in making the scheme a big success.