According to the SBP notification No. FD/350/ 2011/2018, issued Thursday, in order to facilitate the prospective declarants in the payment of tax against declaration of foreign assets under the Foreign Assets (Declaration and Repatriation) Act, 2018, some amendments have been made in the payment procedure.
Now, the tax payment can be made through banking channels either from the declarants' own accounts or from the accounts of the declarants' immediate family members, ie, his/her parents, children, spouse and siblings (brothers and sisters). Previously, the prospective declarants were required to make the payment wire transfer into the SBP account.
In case of payment through the immediate family member's accounts, the declarant while sending the copies of payment Slip ID (PSID), Form 'A' etc, to SBP for generation of (Computerized Payment Receipt) CPR, will also be required to send satisfactory documentary evidence to establish the relationship.
The balances in foreign currency accounts of the declarants or their immediate family members being maintained with banks in Pakistan as of 31st March 2018 or 20th June 2018, whichever is less, can also be used for the purpose of tax payment.
The declarants having bank accounts outside Pakistan but presently residing in Pakistan can also pay the tax in US dollar by depositing the US dollar denominated cheques with the authorized branches of National Bank of Pakistan (NBP) in Pakistan for collecting the proceeds for onward credit to the SBP account in NBP New York.
While, NBP has been advised to make special arrangements for expeditious collection of the cheque proceeds, it may take 7-10 days in collection of the proceeds. The declarants using this payment option should be aware of possible delays in collection of the proceeds. The SBP will issue the CPR on realization of funds in its account.
The tax payment can be made within three days of generation of PSID.
According to SBP, the rest of the mechanism as prescribed through the SBP Notification dated 16th April, 2018 will remain the same.
In addition, the SBP has also issued FAQs on the payment procedure and it has clarified that the tax payment cannot be made through Exchange Companies, Money Business Services, etc. The tax payment can only be made through banking channels
The funds can be remitted within three days of generation of the PSID. The remittance date means the date on which the declarants bank sends the funds in the SBP account in New York through wire transfer and gives a copy of the SWIFT message to the declarant.
The SBP has also mentioned that as the tax liability is in USD, the exchange rate variation will have no impact on the tax liability of the declarant. The CPR is issued for the same PKR and USD amounts as mentioned in the PSID. Thus the exchange rate for the purpose of tax payment is locked for the taxpayer at the time of generation of PSID. The liquid funds to be repatriated for conversion into PKR will however be converted and deposited in the declarants' PKR account at the rate prevailing on the date of realization of USD funds in the SBP account.