Banks Deposits of Up to $10,000 Are Mandatory To Declare As Assets

Karachi, July 02, 2019: Foreign currency deposited in banks’ accounts of below the value of $10,000 could be declared under the Asset Declaration Ordinance 2019 in connection with the amnesty Scheme.

This was informed by State Bank of Pakistan (SBP) after the promulgation Assets Declaration Ordinance 2019 in a view to providing for voluntary declaration of undisclosed assets, sales, and expenditures, for the purposes of allowing the non-documented economy’s inclusion in the taxation system and encouraging a tax compliant culture.

As per the ordinance, the declaration made will be valid if the foreign currency is deposited into individuals and corporation’s own foreign currency account of local banks at the time of disclosure and it is retained in the same account till June 30.

According to SBP, various local banks maintained reserves of over $7 billion of Dollars and foreign currency including accounts of their customers—individuals, NGOs, corporations, etc. Not only the foreign currency is retained in banks accounts for the purpose of transactions but also for earning profits offered by various banks at a handsome rate.

The central bank clarified that a declarant, including a non-filer, can deposit foreign currency in cash into his or her account but the limit of deposits over $10,000 in a single day will not apply under Asset Declaration Ordinance.

Customers could only deposit their foreign currency in banks account if they declare them with the Federal Board of Revenues.

SBP stated that banks while accepting such deposits will obtain a copy of the declaration filed with the Federal Board of Revenue (FBR) and accept the deposit only if the amount being deposited is equivalent to the one declared in the filing with tax body.

The banks shall ensure the confidentiality and secrecy of the information contained in the declaration submitted to them by declarants along with deposit request.

Previously, foreign currency accounts were free from all Foreign Exchange Restrictions. In other words, account holders have full freedom to operate on their accounts to the extent of the balance available in the accounts either for local payments in Rupees or for remittance to any country and for any purpose or for withdrawals in the shape of foreign currency notes and travelers’ cheques.

Personal foreign currency accounts of any nature should not be used for commercial and business purposes. Further, in case of any deposit of foreign currency notes of more than $10,000 (or equivalent in other currencies) in a single day, the account holder shall be required to present the original receipt of acquisition.

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