Tax Amnesty Scheme is receiving encouraging results and its success would help resolving the current account deficit and balance of payment issues according to Federal Board of Revenue (FBR). As the deadline for the tax amnesty scheme gets closer the number of beneficiaries under tax amnesty scheme is increasing with every passing day. Under the scheme, the people could benefit by declaring their domestic and foreign assets as they would have to pay only a nominal tax under the scheme.
Although little information has been made public by the government regarding the success of the scheme but a recent newspaper report has claimed that Rs21 billion has already been raised under it in the form of taxes till June 21. The report further claimed that the total amount of tax paid on assets declared under the scheme could well go as high as Rs100 billion. If such a figure is indeed achieved, the scheme will be largely seen as a success.
Back in April, merely weeks before it was set to complete term the Pakistan Muslim League-Nawaz government had offered a ‘one-time’ amnesty scheme to whiten undeclared assets at home and abroad, reduction in income tax rates for existing taxpayers and issuance of dollar-denominated bond.
Under the scheme, complete tax exemption was offered on annual income up to Rs1.2m, it was announced that maximum percentage of 15pc would be levied on income above Rs4.8m per annum. The government offered individuals that they can declare undeclared assets held locally or abroad after payment of nominal penalties. A number of other relaxations were also offered under the scheme.
When the scheme was announced by the government, both major opposition parties, Pakistan Tehreek-e-Insaf and Pakistan People’s Party vehemently opposed the scheme terming it a move to allow legalizing black money.
With the scheme now nearing deadline there have been calls to extend the scheme, this shows that there is interest in the scheme but also shows that the government offered the scheme very late in its tenure and the implementation on the scheme was left with the caretaker setup. The apprehensions regarding the scheme in the earlier days also didn’t help; such apprehensions could have been minimized if the government took the parliament on board before announcing the scheme.