Amnesty schemes come to an end

RECORDER REPORT

ISLAMABAD: The two tax amnesty schemes, ie, Voluntary Declaration of Domestic Assets Act, 2018 for undisclosed income and domestic assets and Foreign Assets (Decla-ration and Repatriation) Act, 2018 for undisclosed foreign assets have been expired on July 31, 2018.

Sources told Business Recorder Tuesday that the Federal Board of Revenue (FBR) has not extended the amnesty schemes. The FBR has provisionally collected Rs 255 billion during first month of current fiscal year, ie, July 2018 against Rs 211 billion in July 2017, reflecting an increase of Rs 44 billion. These are provisional figures and revenue collection would further increase on compilation of final data for July 2018.

According to sources, the number of declarations have been increased from 55,225 to 70,000 till July 31, 2018. So far, nearly Rs 122 billion have been generated through the scheme. In June 2018, declarants paid around Rs. 97 billion out of which around Rs. 36 billion have been collected on foreign assets and 61 billion on domestic assets. In addition, $ 40 million were repatriated in the said period.

In July, the FBR generated around Rs 25 billion from the scheme and total tax collection under the scheme stand at around Rs122 billion. The FBR will also include the amount of tax under the scheme where Payment Slip ID (PSID) or electronic payment challans have been issued for payment of taxes under the scheme. 

Sources said the response of the scheme during June 2018 was very positive. However, the response of the scheme was not encouraging during the extended period of July 2018.

The original closing date for filing of declarations under the amnesty scheme was June 30th, 2018. It was extended till July 31st, 2018 on account of representations from trade bodies, professional associations and general public due to short operational period after clearing legal and procedural challenges and problems faced by declarants in the payment of tax on foreign assets and repatriation of liquid assets. The Presidential Ordinances dated June 30th, 2018 amended the amnesty acts to extend the applicability date of the schemes and to include explanations on ambiguities such as exchange rate.

Amnesty scheme for foreign assets applies to both liquid and immovable assets such as bank accounts, shares and mortgaged properties. Tax rates range from 2 percent to 5 percent, depending on the type of asset. Special tax rate of 2 percent was applicable to liquid assets which are repatriated into Pakistan. The amnesty scheme for domestic assets covers all types of assets and income, with tax rates of 2 percent and 5 percent. To protect declarants from any harassment, both schemes under Voluntary Declaration of Domestic Assets Act, 2018 and Foreign Assets (Declaration and Repatriation) Act, 2018 promulgated on 8th April 2018 which eventually was made part of Finance Act 2018 to ensure complete confidentiality of declarants’ information. Moreover, such information cannot be used as evidence against declarants under any other law.