President Dr Arif Alvi on Wednesday signed the presidential ordinance regarding the newly introduced tax amnesty scheme related to disclosure of assets.
Following the signature of the president, the scheme will come into effect across the country, and will be applicable to undeclared assets until June 30, 2019.
A day earlier, the federal government approved the tax amnesty scheme during a cabinet session held under the chair of Prime Minister Imran Khan.
Sources said that the scheme would be applicable to benami bank accounts.
The individuals who took charge of government offices after 2000 would not be able to benefit from the amnesty scheme.
Suggestions were made during the cabinet meeting to charge 4 percent tax from the persons who declared their properties until December 31, and 2 percent for those declaring assets until September 30, sources said. According to the new law, 6 percent tax would be collected on the declaration of foreign assets and 4 percent taxation on declaring assets inside the country.
Adviser to PM on Finance Abdul Hafeez Shaikh had said that every Pakistani citizen – except for public office holders and their dependents – could avail this scheme to declare all previously undisclosed assets either abroad or in Pakistan. Announcing the particulars, he said that citizens could use the scheme to whiten previously undeclared assets abroad by paying 4 percent tax. He said that a condition to declaring cash was that the amount be kept in a Pakistani bank account. He said that those who wished to keep the money abroad after getting it whitened would have to pay 6 percent tax.
For declaring properties, he said that value on which tax would be charged would be the market value, given that it was not less than 1.5 times the FBR-assigned value.
He further said the deadline of June 30 would not be extended and that the scheme was the last opportunity for Pakistani citizens to declare previously undisclosed assets before the “law takes its course”.
He added that the scheme would also facilitate holders of benami accounts and properties in declaring their assets before they were confiscated under a new law for benami assets, which also carried the possibility of prison sentences.
Salient features of new ordinance
* 5 percent tax on individuals declaring assets by June 30, 2019
* 10 percent tax on individuals declaring assets by September 30, 2019
* 20 percent tax on individuals declaring assets by December 31, 2019
* 30 percent tax on individuals declaring assets by March 31, 2020
* 40 percent tax on individuals declaring assets by June 30, 2020
* Recommendation for investment in Pakistan Banao Certificates for those declaring assets abroad
* Recommendation for tax amnesty scheme for real estate sector
* 1 percent tax on those declaring property by June 30, 2019
* 2 percent tax on those declaring property by September 30, 2019
* 4 percent tax on those declaring property by December 31, 2019
* The scheme will also be applicable to benami accounts
* 3 percent tax on undeclared sales
* The scheme cannot be availed by individuals holding government positions after 2000
* The scheme will not be applicable on cases being heard in court.