With merely weeks remaining before the caretaker setup takes over from the incumbent government, has announced tax reforms aimed at clamping down on tax evaders. The key points of the Prime Minister’s tax reform package cum amnesty scheme mean that CNIC numbers will be made NTN numbers to monitor tax compliance of all citizens. Income tax brackets and percentages will be revised. Complete tax exemption on annual income up to Rs1.2m will be offered; maximum percentage of 15pc will be levied on income above Rs4.8m per annum. Moreover, undeclared assets held locally or abroad could be declared after payment of nominal penalties. Those who avail the scheme will be granted one-time exemption from accountability laws. Tax collected on all property transactions to be made uniform. Government will have the right to purchase any property by paying 100pc over and above its declared value within six months of its registration. Government will also monitor citizens’ financial records and issue notices if they find evidence of tax evasion. Penalties will be decided in parliament. President Mamnoon Hussain has also promulgated four ordinances to implement the Economic Reforms Package envisaging “one-time” amnesty scheme to whiten undeclared assets at home and abroad and reduction in income tax rates.
The tax reforms and amnesty have been met with fierce criticism from the opposition parties, with both Pakistan People’s Party (PPP) and Pakistan Tehreek-e-Insaf opposing the amnesty scheme. Rejecting the government’s new amnesty scheme allowing Pakistanis to remit offshore wealth at only two percent tax rate, Pakistan Tehreek-e-Insaf Chairman Imran Khan termed the amnesty scheme a brazen attempt by Prime Minister Abbasi to save criminals. Pakistan Peoples Party leader and former chairman of the Senate Senator Mian Raza Rabbani has also criticized the tax amnesty scheme saying that it is aimed at facilitating big business, capitalists and elite class to whiten their black money. He also questioned the rationale behind announcing the scheme when the government has only 55 days to complete its constitutional term.
It is pertinent to mention here that this is the fourth amnesty scheme during the incumbent government’s tenure. The previous schemes largely failed to fulfill the expectations. The fate of the current tax reforms package and the amnesty scheme for now also looks questionable.
The newly announced tax reforms and amnesty scheme has been met with stern criticism from opposition parties.
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