Stunning revelations over the 2 tax amnesties schemes offered by Pakistan government

Stunning revelations over the 2 tax amnesties schemes offered by Pakistan government

ISLAMABAD - Stunning revelations have been made over the 2 tax amnesties schemes offered by Pakistan government as both controversial schemes could only collect meager tax of Rs 5 billion only.

Federal Board of Revenue (FBR) has shared the details of the two tax amnesty schemes with the National Assembly Standing Committee on Finance.

The meeting was informed by the tax authorities that Rs. 1 billion in taxes were recovered from money laundering of $5.5 billion because of the amnesty schemes offered in 2018 and 2019. The meeting was further told that tax authorities could have imposed a 35% tax and a 35% penalty on the laundered amount of $5.5 billion.

Asad Umar was surprised that the government was unable to recover full tax on illegally parked money in foreign banks despite amnesty schemes offered by the successive governments.

Asad criticized the idea of introducing amnesty schemes to enable citizens to whiten undisclosed assets, saying they show the “weakness of state” against tax evaders. Ayesha Ghous Bakhsh also questioned the use of the amnesty schemes despite a lackluster response.

The FBR’s Director-General International Taxes Mohammad Ashfaque informed the NA panel that they received data of about 57,550 people under the OECD cooperation mechanism.

The tax authorities told the committee that OECD shared the data of 325 undeclared accounts which had over $1 million each as on October 31, 2019.

Of the 325 cases, Rs. 62.335 billion was whitened in 135 cases through the tax amnesty scheme in 2018 and Rs. 31.7 billion was whitened in 56 cases under the 2019 amnesty scheme.

The total tax paid to the government was Rs. 2.819 billion in 2018 and Rs. 1.694 billion in 2019. The Finance committee was informed that in total, 115 cases were assessed with tax imposition of Rs. 4.063 billion and Rs. 1.002 billion was recovered against the imposed tax.

10 cases are under proceedings, the committee was informed.

Overall, FBR collected just Rs. 5.5 billion with the two amnesty schemes.

The committee was further informed that Common Reporting Standard (CRS) data is expected from 19 more jurisdictions, apart from data from 45 countries which has already been received. Pakistan has also transmitted data to 55 jurisdictions and the OECD team is also helping Pakistan and other jurisdictions in handling different issues related to this data, he added. The committee expressed dissatisfaction with the performance of the FBR with regards to recovery under OECD.