ISLAMABAD: The tax amnesty scheme has been launched to provide an opportunity to the overseas Pakistanis to bring their assets back to Pakistan and come into the tax net, Federal Board of Revenue (FBR) Chairman Tariq Mahmood Pasha said.
As per agreement with Organization for Economic Cooperation and Development (OECD), exchange of information about the financial bank transactions are going to be shared from this September whereas all other members of the OECD have already started sharing data and information, he said.
Almost in mid-September 2016, Pakistan became the 104th jurisdiction to join the most powerful multilateral instrument against offshore tax evasion and avoidance by signing the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.
The convention is the most powerful instrument for international tax cooperation. It provides for all forms of administrative assistance in tax matters: exchange of information on request, spontaneous exchange, automatic exchange, tax examinations abroad, simultaneous tax examinations and assistance in tax collection. It guarantees extensive safeguards for the protection of taxpayers’ rights. By signing, Pakistan sent a strong signal of its commitment to fight offshore tax evasion and avoidance.
Defending the timing for the launch of tax amnesty scheme before the Senate Standing Committee on Finance and Revenue here, Pasha said that timing for the launch of scheme was crucial because there left very less time till the September and the government wanted to offer an opportunity to the Pakistanis to declare their undisclosed and undeclared assets abroad and join the tax net; otherwise, their assets and money would have been confiscated by those countries where they were.
He further said that it was a wrong impression that all the assets abroad of the Pakistanis were illegal or funds present in foreign banks were result of money laundering; factually, all the assets and funds belonged to the business community, which had transferred their money and assets abroad due to power crisis and law and order related issues in Pakistan.
He also elaborated that there were three strategic objectives for the tax amnesty scheme; repatriation of assets from abroad, their productive utilization in the national economic growth as well as broadening of tax net. To meet these objectives, the scheme has been aptly designed; therefore, huge repatriation of funds and assets is expected.
Moreover, he said that FBR was going to launch a comprehensive mass awareness campaign regarding declaration of domestic assets scheme next week. Furthermore, FBR has moved a list of one million potential taxpayers’ list to the National Database and Registration Authority (NADRA) and on the basis of information about those people; new taxpayers will be added in the tax net.
“Therefore, the impression about squeezing tax base in result of increasing the minimum limit for income tax from Rs 4 lac to Rs 12 is totally baseless because, we are going to add even higher number of taxpayers in the tax base” he maintained.
