Islamabad: The Federal Board of Revenue (FBR) has notified the rules for the Asset Declaration Scheme—the current government first amnesty scheme geared towards whitening assets—announced earlier this month, a news source reported.
The four-page document, termed the ‘Assets Declaration (Procedure and Conditions) Rules 2019’, was released yesterday for seeking the suggestions and reservations of all stakeholders by May 22; following which date the rules would become finalized.
The rules define four main categories: manner, conditions, payment of tax under other laws, and revision of declaration.
For the purposes of whitening undisclosed assets and expenditure, the declarant would be required to file his/her income tax return and wealth/financial statement for the tax year 2018 (as it existed on June 30 of the same year). This condition will be applicable on those individuals who did not file their tax returns for the said tax year. Those who did so have the option to revise their return and financial statements or wealth statement.
The rules require the value of foreign assets to be declared in foreign currency, with all applicable taxes and default surcharges to be paid under the same arrangement.
The scheme can be availed by all companies, associations of persons and individuals for the express purposes of whitening their assets, expenditures and sales not declared until June 30, 2018. As such, the scheme extends no provision for whitening undeclared incomes–both domestic and foreign.
The assets placed within the country and abroad (except for real estate) can be whitened at a rate of four-percent of their individual value. Once regularized, it will be mandatory to keep these cash assets in Pakistani bank accounts. For people who intend to keep their whitened money abroad, a tax rate of 6% will be applicable.
For the declaration of real estate, the value of a property would be fixed at 150% of its FBR value, in order to bring it to par with the market rate. Where FBR rates do not apply, the value of a property would be calculated at 150% of its DC value. Similarly, the value of a piece of real estate would be considered 150pc of its DC value in instances where the FBR value has not been notified, or is less than the DC rate.
Additionally, the current scheme will allow declarants to enhance the publicized value of immovable property. A 1.5pc tax rate will be levied for whitening domestic real estate.
In case of foreign real estate assets, the fair market value will be determined at the exchange rate in effect on the date of declaration.
