With the objective of documentation of economy, the government will bring a modified Assets Declaration Scheme 2019 after two to three days with the possibility of reduced rates on declaration of undisclosed assets, particularly foreign assets. Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh has directed the Federal Board of Revenue (FBR) to modify and refine the scheme by making it more attractive and persuasive.
The rates, timing of the scheme and its scope were discussed in detail during the meeting. After the period of two to 3 days, the modified scheme would be again discussed by the stakeholders. On Tuesday, Shaikh chaired a meeting to review the Assets Declaration Scheme and the meeting deliberated upon various aspects of the scheme and emphasised the need for making it simpler and implementable.
According to sources, there is a need to reduce the tax rates of the proposed amnesty scheme for legalisation of undeclared assets held in Pakistan as well as aboard. As foreign assets information is now available with the FBR, there is a very strong likelihood that the owners of undeclared offshore assets would avail the scheme. The FBR is fully equipped with the necessary data of foreign assets held by Pakistanis abroad and now they would have the last chance to avail the scheme for legalisation of their assets.
Therefore, a very simplified version of the scheme would be drafted in the next few days with possible reduction in the tax rates. The objective of the scheme is not to increase revenue collection but to document the economy. The cut-off date for the scheme has not yet been finalised. Sources said that the tax amnesty scheme is still under consideration of stakeholders. The meeting discussed two major issues, i.e., lower tax rates to be offered under the scheme and maximum duration of the scheme. Stakeholders are demanding maximum time period for availing the scheme.
It is expected that the final presentation of the scheme would be given to the Prime Minister Imran Khan after his China visit during the current month. Moreover, the maximum period may be offered in case of depositing the tax money and repatriation of cash assets. However, the people may be required to declare their un-disclosed assets till proposed period of June 30, 2019.
Under the proposed scheme, the tax payments may be allowed to be made in instalments. Indonesia has offered people a period of one-and-a-half years for repatriation of foreign assets under its amnesty scheme. The spokesman for Finance Ministry Dr Khaqan Hassan Najeeb in his tweet stated that Advisor to Prime Minister on Finance held an in-depth consultation on the Asset Declaration Scheme to fine-tune its scope, timing and rates. The meeting deliberated on all aspects of the scheme. Participants gave useful insights to ensure scheme's effectiveness in strengthening economy.
The participants suggested that since the focus of proposed scheme is on documentation of economy, it should be designed to clearly reflect that objective. The adviser directed the FBR to modify and refine the scheme by making it more attractive and persuasive so as maximum people, who are currently outside the formal economy, are able to become a part of it. He gave directions to FBR to devise a successful communication strategy, enabling the people to easily comprehend the contours of the scheme.
Earlier, the federal cabinet had directed FBR to carry out consultations with experts of various sectors to make the scheme more inclusive and reduce its complications. The meeting was also attended by Adviser to Prime Minister on Commerce, Textile, Industry & Production and Investment Abdul Razak Dawood, Adviser on Institutional Reforms and Austerity Dr Ishrat Hussain, Minister of State for Revenue Muhammad Hammad Azhar, chairman FBR and experts of business, accounting and banking sectors.