Pakistan likelye to bringe back $5 billion under amnesty scheme (Islamabad Pakistan)

ISLAMABAD:
“Pakistanis will not possibly bring back all their offshore assets, but the scheme will be successful if they bring back $4 to $5 billion during validity of the scheme,” Khan said on Tuesday.

As the government struggles to overcome legal challenges that can undermine an upcoming offshore tax amnesty scheme, prime minister’s aide on revenue Senator Haroon Akhtar Khan has said Pakistanis could repatriate up to $5 billion under the proposed scheme.
A chartered accountancy firm has estimated the value of offshore assets held by Pakistanis at $130 billion.

Tax collection

The special assistant said the FBR could aim to collect Rs4.450 trillion in revenues in the next fiscal year 2018-19. He pointed out that a 10% depreciation of the rupee in three months would provide a big boost to revenue collection that would help the FBR to achieve next year’s target.

To a question about the possibility of achieving Rs4.013-trillion tax collection target this year, Khan said the priority was to double the collection over five years and the magic number was Rs3.9 trillion.

In 2013, when the PML-N government came to power, the revenue collection was Rs1.946 trillion.

The PM aide said the government would only clear Rs50 billion worth of sales tax refund claims and that too in three installments. “It is not possible to clear all the outstanding sales tax refund claims of Rs128 billion. Income tax refunds will not be cleared during the current phase,” Khan added.

Khan said for fiscal year 2018-19, Rs4.450 trillion would be a realistic tax collection target for the Federal Board of Revenue (FBR), which was about 11% or Rs437 billion higher than the current year’s target.

He was speaking to media after inaugurating a facility for tax payment through online banking – a step that would minimize the cost of taxes and ensure hassle-free payments.

Khan said the amnesty scheme was at the final stage of preparation, but the government was waiting for the outcome of an ongoing case in the Supreme Court which was deliberating on how to bring back the money stashed abroad by using various channels.

Under the amnesty schemes announced by different countries, he said, people had so far disclosed $360 billion worth of assets, but they brought back only $10 billion to their respective countries.

There is a global campaign against money laundering and tax evasion that has made it increasingly difficult for the tax dodgers to keep their assets in offshore havens.

Replying to a question, the special assistant said the government had not yet decided whether the amnesty scheme would be part of the budget 2018-19, which would be unveiled on April 27, or a separate law would be introduced in parliament.

“Our thinking is that the scheme could be incorporated into the budget, but legal issues may arise if the government tries to amend various laws through the Finance Bill. In case of the Finance Bill, the Senate does not have the voting right,” he added.

In order to ensure secrecy and impunity for those who avail themselves of the scheme, the government will have to amend various laws.

These include the National Accountability Ordinance 1999, Foreign Exchange Regulations Act 1947, Income Tax Ordinance 2001, Prohibition of Benami Transactions Act 2017, Federal Investigation Agency Act 1974 and Companies Act 2017.

Khan said the government would give exemption except from prosecution under the Anti-Money Laundering Act 2010, Anti-Terrorism Act and Narcotics Control Act.

Both the political leadership and the bureaucrats are unanimous on offering a one-time offshore tax amnesty scheme to all Pakistanis by asking them to get their hidden foreign assets legalized at low tax rates.

Pakistan has long been facing the challenge of bringing back assets that its citizens have kept abroad by exploiting legal lacunas.

Khan said the government could offer the scheme for two to six months. There was also a proposal to make domestic assets part of the upcoming scheme as the business community demanded a domestic scheme, he added.