ISLAMABAD – Prime Minister Shahid Khaqan Abbasi has announced a major taxreforms package envisaging substantial reduction in income tax rates andlaunching of an amnesty scheme for undeclared assets.

Addressing a news conference in Islamabad on Thursday, he said maximum rateof income tax is being reduced from the existing 30% to 15%.

Annual income of upto 1.2 million rupees would be exempt from the incometax.

There would be five percent income tax on income falling between 1.2 to 2.4million rupees annually.

The rate of income for the income bracket of 2.4 to 4.8 million rupeeswould be ten percent and 15% on more than 4.8 million rupees.

The Prime Minister said at present only 1.2 million people are filer incometax return out of a population of 207 million.

He said of 1.2 million filers, only seven hundred thousands are paying taxwhile others only filed returns and paid no income tax.

He said even those who are paying income tax include 90% whose tax isdeducted at source.

Prime Minister Abbasi expressed the confidence that the substantialreduction in income tax rate would serve as incentive for people to pay tax.

He said Computerized National Identity Card number would now be the taxnumber of the citizens.

He said in this way 120 million card holders can become tax payer byfilling a form.

Explaining details of the amnesty scheme, the Prime Minister said it wouldbe one time incentive upto 30th of June this year to declare hidden assetsinside and outside Pakistan.

He said five percent penalty would be imposed on cash or value of the localassets in Pakistan.

He said those wishing to repatriate cash from abroad can do so by paying apenalty of two percent.

Three percent penalty would be imposed on whitening of foreign assets.

The Prime Minister said dollar accounts abroad can also be legitimized bypaying five percent penalty.

He said one percent presumptive tax would be levied on propertytransactions.

He said if there is under-declaration of value then the government willhave the option to buy the said property at 100% of the declared value.

He said all data bases would be merged to identify potential tax payers onthe basis of foreign travels, financial transactions, utility bills andfees of children.

He said modern technology would be used to identify tax payers and thosewho are evading taxes.