Karachi, May 18, 2019: The Federation of Pakistan Chambers of Commerce and Industry held an emergent meeting of its members at its head office Karachi under the chairmanship of Abdul Rauf Mukhtar, Acting President of FPCCI and reviewed/discussed the new tax amnesty scheme namely “Asset Declaration Scheme 2019” as announced by the PTI government which has come in to effect through a Presidential Ordinance.
The meeting was attended by S.M. Muneer, leader of the Business Community and Former President of FPCCI; Dr. Mirza Ikhtiar Baig, Sr. Vice Presidents; Vice Presidents FPCCI Arshad Jamal, Muslim Muhammadi, Waqar Mehmood Khan and Noor Ahmed Khan, Zubair Tufail, Former President FPCCI, Former Sr. Vice Presidents FPCCI Khalid Tawab, Syed Mazhar Ali Nasir and Aamer Ata Bajwa, Former Vice Presidents Hanif Gohar, Shakil Dhingra, Akbar Abdullah and other representatives of trade and industry.
The Acting Chief of FPCCI, Abdul Rauf Mukhtar hailing the scheme termed it as a right step in the right direction with the objective to bring the tax evaders under the tax net, enhancing the country’s revenue base, documentation of economy, curtailing the size of ever increasing black economy and to bring dead assets in the mainstream of economy and make them functional. He also urged the government to ensure complete secrecy and confidentiality of the declarants’ data to enhance the confidence of taxpayers in the scheme- a pre-requisite for success for any scheme.
Highlighting salient features of the scheme, the FPCCI Acting President informed, “The rates of tax imposed on undisclosed assets, sales and expenditures would be 4 percent on all assets; rate of tax would be 1.5 percent on domestic immovable properties; rates of tax would be 6 percent on foreign liquid assets not repatriated; rate of tax would be 4 percent on unexplained expenditure and rate of tax would be 2 percent on undisclosed sales.”
The participants termed the 4 percent tax rate as attractive for legalization of black money held in the form of expenditures, sales, and assets including foreign assets; however, they said that duration of the scheme is relatively less as the scheme would offer a period of 45 days to people for declaration of their undeclared assets along with payment of taxes until June 30, 2019.
They added that the PTI government announced its first tax amnesty scheme for whitening of undisclosed expenditures, sales and assets including foreign assets at nominal tax rates and were of the unanimous opinion that the time period of the scheme should be extended beyond June 30, 2019, up to December 31, 2019. They appreciated the FBR’s move to issue the scheme in the Urdu language as well as in simplified declaration form.
They were of the opinion that legalization of undeclared assets at 4 percent is very attractive, although the rates are comparatively higher as compared to the last amnesty scheme. They added for the first time lucrative rate of 1.5 percent has been offered for the real estate sector.
They, referring to the size of the parallel economy was of the opinion that resolution of real state and bearer instrument issues were necessary to clip the wings of a gray economy otherwise these would be surfacing periodically in the future and the government would have to offer an amnesty scheme again and again.
They also lauded government efforts to broaden the tax base and enhance tax to GDP ratio as it was one of the lowest in the world. The participants were of the opinion that “This time the scope of the scheme would be for those avenues which were not covered in earlier ones like sales tax and benami assets especially benami bank accounts.”
The members urged the government to publicize the scheme rigorously because that one may who may not be aware the penalties associated with it for not availing the scheme, including confiscation and imprisonment, and that this is the very last chance to avail it. They also proposed that the limit of RS. 5 million for gold jewelry be withdrawn and the condition of depositing cash in hand in the bank to avail the scheme be also removed.