Home »Top Stories » Amnesty scheme: FBR upbeat over response; $4 billion may be fetched

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  • Jun 23rd, 2018
  • Comments Off on Amnesty scheme: FBR upbeat over response; $4 billion may be fetched
Federal Board of Revenue (FBR) Spokesperson and Senior Member Inland Revenue Policy, Dr Muhammad Iqbal, said on Friday that response to the amnesty scheme is very positive, adding the last date (June 30, 2018) for filing of declarations would not be extended.

He further said those who are not availing benefit from the scheme would face serious consequences and strict action will be taken against the owners of undeclared and unexplained assets held locally as well as aboard. Dr Muhammad Iqbal said this while addressing a press conference here at the FBR House.

Dr Iqbal said the FBR is now in a better position to tackle the issue of foreign assets held by Pakistanis aboard through several key amendments made through the Finance Act 2018, particularly amendments regarding time limitation.

The FBR has launched an extensive campaign to make the scheme successful. The government has announced two tax amnesty schemes, namely Voluntary Declaration of Domestic Assets Act, 2018 for undisclosed income and domestic assets and Foreign Assets (Declaration and Repatriation) Act, 2018 for undisclosed foreign assets. During visits to chambers, tax bars and trade bodies, etc, it seems that there is a little bit confusion about the scheme among the people. For which the FBR has issued frequently asked questions (FAQs), created helpline and massive awareness campaign about the scheme.

Asked whether the scheme would generate US $3-4 billion from non-resident Pakistanis, he said that keeping in view the increasing trend of declarations and feedback of tax consultants/chartered accountants, the amount could be close to that figure, depending on the positive result of the scheme. Most of the persons have hired tax consultants/chartered accountants for filing declarations and they said the response is very encouraging.

Presently, the FBR is receiving an equally positive response to both the schemes introduced form domestic assets and foreign assets. About the pace of declarations under the scheme, he said that first declaration was filed on April 13-14 and the pace of the declarations has gained momentum. "Traditionally, it is our culture that people file returns in the last dates. Similarly, a large number of declarations are expected in the last days of the scheme," he added. To a question, the FBR senior official said the collection from the amnesty scheme would be made part of the FBR revenue collection.

"The people who would not avail the scheme would have to face serious consequences. Persons not taking benefit of the scheme would be ready to face action," Dr Iqbal warned.

He also warned the real estate sector to voluntarily declare their assets under the amnesty scheme till June 30, 2018 as the FBR is fully equipped with real estate data.

The mapping of the properties has been done by the FBR through a survey and now it has complete information of real estate sector. The FBR will take very serious action against the persons dealing in real estate sector who would not avail the scheme.

He categorically said that the developers and builders in real estate sector have a unique opportunity to whiten their undeclared assets under the amnesty scheme to be expired on June 30, 2018, as the FBR is fully prepared to take enforcement actions against the evaders from July 1, 2018 onwards.

Explaining the term consequences, the FBR senior member said that the legal disabilities have been removed from the tax laws under the Finance Act 2018 to tackle foreign assets held by Pakistanis aboard. As per amendment introduced in Protection of Economic Reforms Act, 1992, a person, who is a non-filer, is prohibited from depositing any cash into any foreign currency account. The FBR is now in a position to tackle foreign currency accounts after amendment in the Protection of Economic Reforms Act, 1992.

Through new amendments introduced in the Finance Act, 20108, the FBR has removed legal ambiguities to tackle the issue of foreign assets. The FBR has also introduced the concept of foreign income and assets statement to be filed by persons having foreign income or assets as specified in the law.

A big change has been made through the Finance Act 2018 regarding time limitation for opening of past accounts/records beyond five years period. The FBR can now tax foreign assets from the year of its discovery. Irrespective of the date of creation of the foreign assets, the FBR can now tax such assets.

About the number of filers and amount deposited under the amnesty scheme, the FBR member said that the figures and data of the amnesty scheme are expected to be shared next week. "At this stage, we cannot share data, but so far the response to the scheme is very encouraging and positive as compared to the amnesty schemes announced in the past," he said.

Legally, the time limitation for five years for the commissioner to issue notice to file return of income shall not be applicable if the commissioner is satisfied on the basis of reasons to be recorded in writing that a person who failed to furnish his return has foreign income or owns foreign assets.

About the extension in time period of the scheme, the FBR senior member said that the scheme has been notified through a special law. The FBR has no power to extend the date of the amnesty scheme issued through the special law. The FBR can extend dates in certain cases under the Income Tax Ordinance and other federal laws governed by the FBR, but not in case of the amnesty scheme. The government has no intention to extend the date of amnesty scheme, he added.

To a query, he said that money from the proceeds of crime cannot be legalized under the scheme. The scheme is available to all citizens of Pakistan except public office-holders, their spouses and dependent children.

The government would achieve the multi-prone benefits from amnesty scheme including most important aspect of bringing foreign assets into the country. If the scheme is fully successful, the issues of balance of payments of the government would be resolved. Moreover, the FBR will get tax from declaration of undeclared and unexplained assets held aboard.

To a question about deposit of cash in bank account to be declared under the Domestic Amnesty Scheme, he said that the declarant is not required to deposit cash in hand into bank account for availing the amnesty.

He said that the government wants to bring back money held by Pakistanis aboard through declarations under the amnesty scheme "but we cannot allow to legalize money through purchase of dollars from local kerb market."

Asked about the reaction of the Financial Action Task Force (FATF) on the amnesty scheme, he said the concerns of the FATF have been addressed. While drafting the scheme, the government has also taken the input of the FATF and exclusions like criminal proceeds have been mentioned in the scheme. The input of FATF was taken at the time of finalization of the scheme for addressing their concerns.

He said the FATF concerns were only related to the issue of money laundering.

When asked senior FBR officials that so far an amount of Rs 21 billion has been received under the amnesty scheme, officials responded that the figure is not correct and figure of Rs 21 billion cannot be confirmed at this stage. The FBR will share authentic data next week, top officials added.

Copyright Business Recorder, 2018


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