President Mamnoon issues ordinance approving tax amnesty scheme | Pakistan
ISLAMABAD: President Mamnoun Hussein issued a decree on Sunday on foreign assets (Declaration and repatriation), which introduced a scheme of tax amnesty announced by the Prime Minister this week
The resolution covers assets received in installments, declaration of property in accordance with the "fair market value" and its confiscation by the government in case of violation, declared and unannounced foreign assets, including "real estate" pledged assets, stocks and shares, bank accounts, bullions, cash, jewelry, paintings, accounts and accounts payable, beneficial ownership or beneficial interests or contributions to offshore companies and trusts. "
It states that officials appointed by the government to exercise this order will be vested with authority. The provisions of this decree apply to all citizens of Pakistan, wherever they are, other than "holders of public office, their spouses and dependent children."
Foreign assets pledged and repatriated to Pakistan within the prescribed period shall be subject to taxation at the rates specified in the table below:
Information about any person making a statement in accordance with the decision or any information received in any application made in accordance with the resolution is confidential.
On Thursday, Prime Minister Shahid Hagan Abbasi unveiled a package of five-point tax reforms that included a tax amnesty scheme for undeclared foreign and domestic assets and a reduction in income tax rates.
The Prime Minister began implementing the scheme of amnesty and reforms in the last attempt to expand the government's revenue base, just 55 days before the end of the rule
⯈ CNIC (computerized national identity card) to become the tax number is NTN.
⯈ Reduction of income tax rates:
– exemption from taxes on annual income up to 1.2 million Rupees
-5% tax on annual income of 1.2 rupees and 2.4 million rupees
-10% tax on annual income (19459009)
-15% tax on annual income above 4.8 million rupees
⯈ One-time amnesty scheme for taxes:
Citizens can declare previously unannounced:
-Local liquid assets with a penalty of 5%
– Foreign funds with a penalty of 2%
– Assignments / fixed property abroad by 3%
-Dollar accounts can be declared and held abroad with a 5% fine
⯈ Tax Reform real estate laws:
The government says that most of the evasion taxes occur in real estate transactions.
-1% Advance profit tax for all real estate transactions
– value added tax subject to adjustment in the amount of income tax
-The federal government recommends a maximum of 1% local, provincial taxes
-Govt can buy real estate by paying 100% above the declared price
⯈ Monitoring of taxpayers:
The government should monitor financial records of citizens and issue notifications if it finds an evasion ie taxes. Parliament must decide on sanctions
The threat of tax evasion was common in Pakistan, where only 1 percent of the adult population pays the tax.
Announcing that all 120 million national ID card holders will have assigned tax numbers, Abbasi said at a press conference in Islamabad: "If you do not pay taxes, Pakistan will not be sustainable."
He said that politically exposed persons (PPP) and their families were not eligible for benefits under the scheme – valid until June 30.
"According to the amnesty plan, all Pakistanis will be able to declare their unreported revenues and assets and bring their money to the tax base after paying 5%"
"The scheme does not violate money laundering laws"
Advisor to the Prime Minister for Finance Miftah Ismail reassured the concern of the Financial Action Task Force (FATF) on Saturday and assured the tax amnesty the scheme does not violate money laundering laws
"Pakistan's tax amnesty scheme complies with all international laws on combating otms "said the finance adviser when speaking with Geo News.
Ismail shared this he received an e-mail from the global observer for money laundering, the FATF, calling for global needs and coordinated guidelines that must be respected.
"The FATF stressed the need for strict control over money laundering and terrorism (19459009)
Ismail further said that he had not yet responded to this letter.