Govt makes hay as tax amnesty scheme shines

–Caretaker cabinet, on Finance Ministry’s recommendation, approves extension in amnesty scheme until 21st

–FBR sources say approx Rs80bn have been deposited in taxes till June 28

ISLAMABAD: The caretaker federal cabinet has sent a summary to President Mamnooon Hussain, seeking an extension in the tax amnesty scheme by 31 to 50 days, as the number of applicants declaring their assets rose exponentially during the last week of the scheme.

The deadline for the expiry of the scheme was June 30.

Informed sources told Pakistan Today that the State Bank of Pakistan (SBP) failed to issue Computerised Payment Receipts (CPR) to all the people who have made payments during the last week of the scheme, however the filers have been assured that their returns would be deemed filed within the stipulated time.

According to FBR sources, nearly 51,000 people have filed returns declaring their foreign assets and deposited approximately Rs80 billion in taxes till June 28. However, the final amount is going to be much higher as more funds are in the pipeline based on the payment slips issued.

The tax amnesty scheme announced by the Pakistan Muslim League-Nawaz (PML-N) government, which got off to a lacklustre start, saw a surge of interest since the last hearing in the case held in the Supreme Court’s Lahore registry on June 11.

Pressure has been mounting on the government from various sides to extend the deadline.

FBR and Finance Ministry sources said that the total amount of tax paid on foreign assets declared under the scheme could go beyond Rs100bn by the final tally since substantial sums remain in the pipeline and more declarants are stepping forward.

Later in the day, the federal cabinet, on the recommendations of the Finance Ministry, approved extension of closing date of tax amnesty schemes for declaration of foreign assets and domestic income and assets until July 31. This has been effected through a Presidential Ordinance.

The date has been extended by one month to enable general public to file declarations for undeclared foreign assets and undeclared domestic assets and income and thereby get their tax affairs in order.

The amnesty scheme allows people to voluntarily declare domestic as well as foreign assets that had till April 10 been held beyond the tax authorities’ knowledge and reach. It offers varying rates that will be charged on these assets, ranging from 2 per cent to 5 per cent, depending on whether it is a domestic or foreign asset, the asset class, and whether or not it is being repatriated to the country.

Several meetings have been held on the possibility of an extension in the deadline. According to one proposal, the scheme can be extended with higher rates. However, this amount will be counted for the tax year 2017. Another proposal suggested that asset declarations could be allowed now with attendant tax payments to be made later. The fate of both proposals is unknown.

The scheme got off to a slow start as it awaited legislative action as well as a nod from the Supreme Court. Its conversion from an ordinance to an act of parliament was delayed due to opposition in the National Assembly and Senate, but was eventually passed as a separate act.

The Supreme Court’s nod took a while longer, coming eventually by mid-June. Interest in the scheme was lacklustre until then, but the response became brisk immediately after the Supreme Court announced it would not be taking any action to encumber the scheme.

Since then, reports say that the pace of the response gathered speed on a daily basis.