Pakistanis living in the UAE and other countries around the world have been advised to declare all their undeclared assets - property, bonds, cash - by June 30, 2019 and benefit from the tax amnesty scheme as it will be the last scheme by the government, a senior official said on Monday.
Dr Muhammad Ashfaq Ahmed, director general for international tax at Federal Board of Revenues, said tax amnesty is not mandatory but if overseas Pakistanis have assets inside or outside the country and they don't have money trail of these assets, then they should benefit from the scheme and declare those assets. Because later they can be questioned by the authorities inside or outside Pakistan and face penalties and jails.
Ahmed said Islamabad had agreed in principal with the International Monetary Fund that the tax amnesty scheme will not be extended during its financial package tenure which will begin from July 1, 2019. Hence, this tax amnesty scheme will not be extended.
As per amnesty scheme, four per cent tax is applicable on all assets except domestic immovable properties; 1.5 per cent on domestic immovable properties; six per cent on foreign liquid assets not repatriated; four per cent on unexplained expenditure and two per cent on undisclosed sales.
He said the rate of default surcharge on undisclosed assets, sales and expenditures will be 10 per cent in each quarter if they were declared after June 30, 2019 until June 30, 2020.
Declared of assets have to be made on or before June 30, 2019 but tax can be paid after the due date of declaration, FBR said, adding that tax paid would not be refundable so the citizens have to be very careful while submitting tax returns.
Under the amnesty scheme, overseas Pakistanis have to declare their earnings being generated in Pakistan and file tax returns.
All those who want to declare their assets can do so by creating an accounting on the FBR's website and guidelines are available online.
As the deadline of June 30 expires, he warned that the government will be after the tax evaders as it is looking to document the economy in order to improve revenues.
Non-declaration assets could results in confiscation of assets and seven years of imprisonment.
"People whose names appeared in Panama and Paradise Leaks or have offshore properties can also avail this tax amnesty," he added.
Ahmed pointed out that every foreign governments are also going after the undeclared assets and Pakistanis living abroad can be penalized or jailed for their benami (undeclared) accounts.
Who is eligible?
Every one except:
- Public office holder for the last 10 years; spouses, and dependents
- Public company
- Proceeds of crime
- Gold and precious stones
- Bearer prize bonds, shares and other bearer assets
- Proceedings pending in any court of law
Eligible assets and transactions
- Any undisclosed assets, undisclosed sales and undisclosed expenditures held or acquired till June 30, 2019 by the person, anywhere
- Benami assets acquired or held on or before the declaration
- Tax imposed by the department without default surcharge and penalty unless it has attained finality
Applicable tax rates under amnesty
- 4 per cent on all assets except domestic immovable properties
- 1.5 per cent on domestic immovable properties
- 6 per cent foreign liquid assets not repatriated
- 4 per cent unexplained expenditures (spending on weddings etc.)
- 2 per cent on undisclosed sales.
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