ISLAMABAD: Out of total 5363 declarants for availing foreign tax amnesty scheme , Pakistanis living at United Arab Emirates (UAE) stood at number one on account of whitening of their real estate assets while all other major jurisdictions including UK, Switzerland, USA, Canada, Singapore and others remained lag behind for availing this scheme.
Pakistanis living at UAE have outpaced all other countries on account of those who availed this scheme mainly because the tax authorities possessed details of those owning real estate assets at Dubai and others.
“There are total 82848 declarants who have whitened assets valuing Rs2.5 trillion through domestic and foreign tax amnesty schemes as 5353 availed foreign tax amnesty and 77485 got domestic amnesty,” the Chairperson Federal Board of Revenue (FBR) Rukhsana Yasmeen confirmed to The News in her office at Board’s headquarters on Thursday afternoon.
She said that Pakistan also received $366 million so far from abroad as cash on account of offshore tax amnesty scheme . The FBR, she said, would be sending tax notices to few thousands who have submitted declarations but did not pay due amount and now they would be bound to pay full 35 percent tax on their assets.
The chairperson FBR termed this amnesty scheme as successful and said that the FBR so far collected Rs121 billion from this amnesty scheme including Rs44 billion on foreign amnesty and Rs77 billion on domestic amnesty.
However, the FBR sources said that the FBR received taxes of Rs24 billion in July and Rs97 billion in June out of total tax amnesty scheme . “This figure of Rs121 billion will go up by few billions more and it may touch Rs126 to127 billion” said the official. However, after elections of July 25, the pace did not pick up but prior to elections there was one day when the FBR received Rs6 billion in shape of due tax on whitening of assets under this amnesty scheme.
There were practical difficulties as first the tax machinery focused upon achieving its tax collection target before June 30, 2018 and there was lack of ownership within the tax collection machinery. Secondly, the FBR officials say that the State Bank of Pakistan and others took it as routine work and the tax machinery received plenty of complaints from Pakistanis living abroad that the banks were not cooperating with those who wanted to avail this scheme.
When asked that why domestic amnesty attracted more response, they said that the FBR sent out thousands of tax notices on the basis of information obtained through third party and potential non-filers knew very well that the FBR would take stern action after expiry of this amnesty scheme.
Another FBR official told this scribe in background discussions that the foreign amnesty scheme proved futile owing to variety of reasons as it was availed mainly by those who possessed 100 percent documented assets abroad and they were not finding any difficulty for declaring them inside Pakistan by paying very attractive tax rates. Such people having documented and legal assets consulted their lawyers and chartered accountants who advised them to whiten their assets at much lower tax rates. Second only those availed this scheme who took risks just like gambling with the expectations that this risk would help them in their future endeavors.
The FBR officials said that some big business giants did not avail this scheme because of their apprehensions that any misdeclaration would make it null and void. When they witnessed that PTI had won July 25 elections and the incoming PTI led government might kick-start scrutinizing assets of first largest 100 declarants silently to ascertain whether they had any misdeclaration and if found guilty then their declaration could become null and void.