KARACHI – State Bank of Pakistan (SBP) on Thursday issued the procedure forrepatriation of liquid assets and deposit of tax under Foreign Assets(Declaration and Repatriation) Act-2018.
The government has fixed June 30 as the last date for the declaration ofassets and income under Tax Amnesty Scheme-2018.
State Bank, in a statement issued here on Thursday, explained:
1) The declarants cannot pay tax through exchange companies, money businessservices etc. The tax payment can only be made through banking channelseither from the declarants’ own accounts or from the accounts of thedeclarants’ immediate family members i.e. his/her parents, children, spouseand siblings (brothers and sisters).
In case of payment through the immediate family members’ accounts, the taxpayer while sending the copies of payment slip ID (PSID), Form “A” etc. toSBP for generation of computerized payment receipt (CPR) will also sendsatisfactory documentary evidence to establish the relationship.
2) The balance in foreign currency (FCY) account deposits as of March 31,2018 or June 20,2018, whichever is less, can be used for the purpose of taxpayment. For instance if the balance in an FCY account is dollars 10,000and dollars 5000 respectively on March 31, 2018 and June 29, 2018. The taxpayment to the extent of dollars 5000 can be made from this account.
3) While it is highly desirable to remit funds through wire transfer fromthe banks where the declarants or their immediate family members aremaintaining the bank accounts, the declarants having bank accounts outsidePakistan but presently residing in Pakistan can also pay the tax in dollarsby depositing the dollars cheques with the authorized branches of NationalBank of Pakistan in Pakistan for collecting the proceeds for the SBPaccount in NBP New York.
This may however take 7 to 10 days in collection of the proceeds. Thedeclarants using this payment option should be aware of possible delays incollection of the proceeds. The declarants using this payment option shallafter deposit of the cheque with NBP shall electronically transmit the copyof the cheque, deposit slip, PSID, Form A etc. to SBP for issuance of CPR.The SBP shall issue the CPR on realization of the cheque proceeds in theSBP account.
4) It is possible due to deduction of bank charges by the remitting bank.The declarants thus should make sure that the funds being remitted to SBPare at least equivalent to the amount appearing in PSID. The CPR would onlybe issued if the funds appearing in the PSID have been received in the SBPaccount.
5) The whole amount repatriated to Pakistan and the tax paid on the amountbeing declared and repatriated, shall be covered under the amnesty scheme.
6) The declarant can make two separate wire transfers or one at his/herchoice. In case of one SWIFT message (wire transfer), he/she will give thesigned statement of application of funds including the amount to be paid astaxes and the amount to be converted into Pak Rupee etc.
7) The funds can be remitted within three days of generation of the PSID.The remittance date means the date on which the declarants bank sends thefunds in SBP account in New York through wire transfer and gives a copy ofthe SWIFT message to the declarant.
8) To a query that the date of remittance of funds by the declarant’s bankand the date of realization of funds in SBP account in New York bedifferent , State Bank cleared , It can be different due to difference intime zones and/or processing of remittance in New York.
9) About change in the exchange rate on the date of PSID creation and thedate SBP realizes funds in its account, SBP has elaborated that as the taxliability is in USD, the exchange rate variation will have no impact on thetax liability of the declarant. The CPR is issued for the same PKR and USDamounts as mentioned in the PSID. Thus the exchange rate for the purpose oftax payment is locked for the tax payer at time of generation of PSID.
The liquid funds to be repatriated for conversion into PKR will however beconverted and deposited in the declarants’ PKR account at the rateprevailing on the date of realization of USD funds in the SBP account.
10) About , how long it can take to receive Computerized Payment Receipt(CPR), once the amount is remitted to SBP, the Central Bank said the CPR isissued within 24 hours of the receipt of funds in SBP accounts and therelevant documents i.e. copies of PSID, Form A, CNIC, statement ofapplication of funds etc as detailed in SBP notification of April 16,2018.
11) In case of declarant does not receive any CPR, who will be the contactperson in SBP, State Bank of Pakistan outlined that the tax payer shouldsend the reminder on the same email address (tax.foreignassets@sbp.org.pk)at which he/she has sent the documents for creation of PSID. A team of 12officials has been deputed to respond to the queries. – APP