Daily Times

Sir: Last Friday, Indian Prime Minister Narendra Modi fulfilled his key election campaign pledge: his finance minister presented the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 in the Indian Parliament. As the name suggests, the law is aimed at netting all the undisclosed income that Indian residents have parked outside India. Observers say if this bill becomes law, it will be the harshest law in the world. The law will also target the beneficiaries of these assets that include the family members of the owner and every person being a manager (in the case of a company) at any time during the fiscal year. The law proposes to tax undisclosed foreign income at a flat rate of 30 percent, if disclosed within the one-time compliance opportunity given for a limited period. Violation by not disclosing the same in the limited timeframe would lead to harsh penalties of 90 percent of the undisclosed asset and income. Under this law, concealment will be punishable with rigorous imprisonment from six months to seven years if a person or institution helps conceal or falsify foreign income or assets of Indians. It is also noteworthy that during the time of appeal to the High Court or Supreme Court, the tax will be paid in accordance with the assessment made under this Act. It is also pertinent that the provision of coming clean during the limited time period is not an amnesty scheme – as has been often practised in Pakistan — as no immunity from penalties is being offered. It is merely an opportunity for persons to confess and ensure compliance before the stringent provisions of the new legislation come into force.

Can we implement such a law in Pakistan? The critics point out that (a) we have no clue about the amount of black money parked outside Pakistan, and (b) that the Federal Board of Revenue does not have the capacity to act on such a law.
NASIRA IQBAL
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