News Desk |
If the media reports are to be believed then roughly 250 Pakistanis have so far benefitted from the tax amnesty scheme by whitening about Rs450 million in taxes during the ongoing amnesty scheme of Pakistan Tehreek-e-Insaf (PTI)-led government.
On April 26, Prime Minister Imran Khan had approved the tax amnesty scheme – which is meant for whitening the ill-gotten money – during a meeting of the federal cabinet. On Wednesday, the media reported that less than 250 people have availed the scheme and paid a meager amount of about Rs450 million in taxes despite a personal appeal by PM Khan through his televised address.
Resultantly, it is reported, the Federal Board of Revenue (FBR) has not shared the figures with the parliamentarians and the federal cabinet. Separately, the cabinet and the National Assembly Standing Committee on Finance took up the progress on the scheme — Assets Declaration Scheme 2019 – which led FBR to agree that it would share details next week.
Shaikh had said that it was last chance for benami assets holders to come forward, adding strict action would be taken once the time for declaring assets was over.
“Results were extremely poor and people did not respond to the personal appeal made by the premier and the campaign launched by the FBR,” The Express Tribune quoted FBR sources as saying. The paper added that around 250 people paid about Rs450 million to the exchequer.
However, the Minister of State for Revenue Hammad Azhar told the paper that he was hopeful the scheme would start getting a good response from next week as he was receiving encouraging feedback from tax bars and Regional Tax Offices.
PTI’s First Ever Tax Amnesty Scheme
PM Khan had chaired the cabinet meeting during which the Assets Declaration Scheme 2019 was approved on April 26. As per the scheme, people living in Pakistan can declare their assets after paying 4 percent tax while those living abroad can declare their assets after paying 6 percent tax. The cabinet has decided that the scheme will end on June 30, 2019, and there will be no extension.
Read more: Hafeez Sheikh disallows PTI’s tax amnesty scheme
PM’s Advisor on Finance Dr Hafeez Shaikh had said that the purpose of the scheme was not to accumulate wealth but to bring more people in the tax net. The philosophy behind the plan is not to “intimidate” people but to encourage businessmen to participate in the legal economy, he had said.
Under the scheme, all assets in Pakistan and Abroad can be declared and the only condition to declare assets is to put them in a bank account. Apart from real estate assets, Shaikh had said, all other declarations would be subject to four percent tax. He had maintained that public office holders and their families could not benefit from the scheme.
Shaikh had said that it was last chance for benami assets holders to come forward, adding strict action would be taken once the time for declaring assets was over.
The 2016 ‘Income Declaration Scheme’ had allowed citizens to report assets previously undeclared to the tax authorities without being prosecuted.
On May 13, FBR Chairman Shabbar Zaidi had said the government’s focus was to enhance direct tax net to improve the economy. He had said he would try to make changes in the tax collection system, adding that data from non-filers would be collected to include them into the tax net.
PML-N’s Tax Amnesty Scheme
The PML-N’s tax amnesty scheme had resulted in the whitening of assets worth Rs2.5 trillion in return for Rs124 billion in taxes. Over 82,000 people had availed the previous tax amnesty scheme.
However, Dawn reported, the FBR again missed its nine-month revenue target by a massive Rs318bn a year later. Resultantly, the FBR convinced PM Khan and the ex-finance minister Asad Umar to bring about a new scheme to earn some quick bucks until the government comes under the fiscal discipline of the International Monetary Fund (IMF).
Read more: PML-N’s ‘volatile’ amnesty scheme is here to stay for another month
Agreeing with the suggestion, the government had announced the scheme two days after it reached an agreement with the IMF about a US$6bn bailout to implement an “ambitious structural reform agenda” over a period of 39 months.
Meanwhile, Dawn had earlier reported, in the 1958 amnesty scheme, Rs1.12bn was recovered, followed by Rs920m in 1968, Rs1.5bn in 1976, Rs10bn in 2000 and Rs3.16bn in 2008 and more than Rs100bn in 2018.
Tax Amnesty Schemes in India
According to the Indian media reports, a four-month amnesty for tax
Read more: FBR modifies tax amnesty scheme
The 2016 ‘Income Declaration Scheme’ had allowed citizens to report assets previously undeclared to the tax authorities without being prosecuted. A charge of 45 percent was levied on the assets declared under the scheme.
Earlier, India had introduced ‘Voluntary Disclosure of Income Scheme’ in 1997. In the erstwhile scheme, income or assets worth INR333.39bn were voluntarily declared and an aggregate tax of INR97.6bn was paid to the government.