- Former adviser says such schemes have no linkage to economy
ISLAMABAD: The federal government is about to announce another tax amnesty scheme despite the fact that five amnesty schemes announced by two elected governments previously failed to yield desired results.
Sources privy to the development informed Pakistan Today that the idea of announcing the amnesty scheme is to whiten the black money before September 30, 2018, because under the Organization for Economic Cooperation and Development (OECD) agreement, the Federal Board of Revenue (FBR) will get details of every Pakistani who has opened bank accounts before December 31, 2017, in 104 countries including Switzerland.
Sources said that the business community is pushing the government to announce the scheme as early as possible; however, the incumbent government wants to take approval from the Parliament this time.
An official source confirmed that the real purpose of introducing this scheme is to escape from the post-election scenario in which if the present government fails then the problems will increase for those businessmen and politicians who have made investments abroad.
The sources also claim that some government top officials have been transferring money to UAE recently from Pakistan through some blue-eyed bureaucrats because their tax laws suit them. Furthermore, the Federal Investigation Agency (FIA) is also investigating the cases involving real estate, but the authorities were not cooperating with them.
The tax department officials said that they were opposing the move, but if the government goes on to announce the scheme then they would be bound to obey.
It is pertinent to mention here that the two elected governments – of PPP and PML-N – announced five amnesty schemes. An asset declaration scheme, at 2 per cent tax rate, announced by PPP government only attracted Rs2.5 billion worth of assets.
A side-scheme for releasing customs duty evaded vehicles was also offered, which attracted more than 50,000 vehicles.
The PML-N government has already offered three schemes. First one was in December 2013 when an amnesty was given to those investing in selected industries after asking their sources of investment – but not from any criminal liability – made until 2015.
The second one involved small-traders being offered a registration scheme in 2015 where their initial capital was exempted from disclosure of sources. The scheme was an utter failure despite claims of traders that at least a million traders would be registered.
The third one was to improve valuations in the real-estate sector and a scheme was offered that would have valued properties on FBR determined values and would have attracted rates at 10 per cent, 7.5 per cent and 5 per cent for holding period of up to one year, two years and three years respectively, and none for longer period. This has also not succeeded in eliciting significant declarations.
Prominent financial expert Dr Ashfaq Hassan said that government was the giving amnesty scheme to benefit the blue-eyed people. “The incumbent government announced three amnesty schemes but what was their output,” he asked.
There is no linkage of amnesty schemes to the economy, the former advisor stated, adding that if the government will announce the scheme then it will reflect a bad-intention of the government.
Minister of State for Finance Rana Afzal, while talking to Pakistan Today, stated that the top government officials will sit together on Thursday to finalise the amnesty scheme. “I cannot say anything before it is formally announced,” he added.