Karachi, June 3, 2019: Federal Board of Revenue (FBR) is all set to tighten the screws on banking customers who will be asked to whiten their bank deposits of Rs. 0.5 million and above under the recent Amnesty Scheme.
In the recent meeting with the FBR Chief with Chief Financial Officers of different banks, it has been decided that banks will write letters to their customers having above half million of Rupees in their banks account asking them to whiten their money under the latest amnesty scheme.
Accordingly, customers having deposits of Rs. 0.5 million in the banks’ accounts and they have not disclosed their money to the FBR, will be liable to avail Asset Declaration Scheme 2019.
These customers maintain current accounts and savings\ accounts in different banks and fall multiple categories including accounts by salaried class, self-employed, small entrepreneurs. Old-aged pensioners and those having saving of this threshold for the purpose of education and health will also feel the burn of this tax.
The act of FBR and banks is likely to cause ire among the customers at large that may invent different ways to invest or deposit their money in Dollars/ Gold and other avenues rather than paying new taxes to the government. Despite the likely move by banks depositors, the tax authority might collect billion of taxes from this new avenue through the exercise has not been initiated yet by the banks on the demand of FBR.
Under the new leadership of Shabber Zaidi, FBR is flexing its muscles to generate tax revenues from the profitable sector such as banks including its investors and customers.
The access to FBR to banks’ account holders was strongly resisted in the past not only by banks but their tax consultant as well as this could derail the process of financial inclusion and use of banks for depositing and saving money by the customers.
The tax revenue authority was much criticized to enhance the burden on banks customers mainly taxpayers.
Overall, banking industry maintains the deposits of over Rs. 13 trillion.
FBR also asked CFO’s of the bank to provide data of withholding taxes to the authority.
Accordingly, the bank will provide the data of withholding taxes w.e.f of 01 January 2018 onwards with CNICS of the withholding tax collectors (companies) to FBR by 17 June 2019.
FBR committed that the data of the customer’s data will be kept confidential. The tax authority claimed that it took this decision in the backdrop of FATF requirement which made it mandatory for banks to comply with the requirements of Know Their Customers (KYC).