Government announces its first tax amnesty scheme

Islamabad: The government has announced its tax amnesty scheme titled the ‘Asset Declaration Scheme’, following its approval by the cabinet; a news source reported.

Read: Amnesty scheme’s details finalised, approval awaited

Advisor to the Prime Minister on Finance Dr Abdul Hafeez Shaikh briefed the media regarding the scheme. He stated that realistic targets and low rates had been set, with the aim of this amnesty provision being to document the economy, and not to generate revenue.

The scheme will be in effect till June 30, 2019. As per sources, all Pakistanis will be eligible to apply for amnesty; except public office holders or their dependents.

The highlights of the amnesty scheme pertaining to assets, other than real estate, are as follows:

• All domestic or foreign assets (except real estate) can be registered upon payment of 4% tax on the value of a particular asset.
• The ‘whitened’ cash assets will have to be kept within Pakistani bank accounts.
• People desirous of keeping their whitened money abroad will need to document the asset at a rate of 6% of its value.

The highlights of the amnesty scheme for real estate are as follows:

• For declaration of property, the actual value of a property will be calculated at a rate that is 1.5 times higher than its accorded FBR value–in order to bring its value at par with market rate.
• Such a property will then be documented/whitened at a rate of 1.5% of its calculated actual value.

The amnesty will also allow citizens to whiten their benami accounts and properties before the Benami Transaction (Prohibition) Act, 2017 is enforced.

Answering questions regarding the amnesty scheme, the Minister of State for Revenue Hammad Azhar remarked that unlike past amnesty schemes, the current one makes it mandatory for people to declare their assets to become registered tax filers. It also provides options for businesspersons to revise their balance sheets.

Read: Does Pakistan need another amnesty scheme along Indonesian lines?

As per reports, under the current amnesty scheme, people will now be required to deposit all of their cash in hand into their bank accounts, and declare the sum along with a deposit slip as proof.