Dubai: Pakistani expatriates have been urged to declare their undisclosed assets in their country by June 30 to avoid penalties and imprisonment.
All Pakistanis are required to declared their ‘hidden’ assets under the new tax amnesty scheme called the Assets Declaration Scheme launched by the Imran Khan government on May 15.
Though the Non-Resident-Pakistanis (NRPs) are exempt from paying any taxes back home on their income abroad, they are required to declare their assets if they cannot prove that they were bought with legal resources. They will also have to declare all their assets, including properties, businesses and bank accounts they have in Pakistan if they are generating income from them. The wealth that remains undeclared after the deadline would be confiscated and defaulters could also face prison time.
However, NRPs who have the proofs that they remitted money through legal banking channels to buy properties are not required to declare their assets under the amnesty scheme.
“If NRPs can prove that the property they own in Pakistan was bought with legally remitted money or the bank account they have in any Pakistani bank has money sent through legal banking channels, they do not need to worry as they are exempted from declaring them and they do not need to pay any taxes,” explained Dr Mohammad Ashfaq Ahmad, Director General (International Taxes) at the Federal Board of Revenue.
Dr Ahmad especially came from Pakistan to brief the Pakistani expatriate community members and the media about the tax amnesty scheme in case they have any confusion. The gathering was arranged by Consul General of Pakistan Ahmad Amjad Ali at the consulate in Dubai on Monday.
Dr Ahmad tactfully handled volley of harsh questions from the Pakistani expatriates who were quite aggressive during the briefing as they were upset about being taxed for their income they earned outside the country.
Many of them raised the concern that they do not have proof of all their money remitted to Pakistan and hence they are unable to proof the money trail despite the fact that they have been living abroad for decades.
“You must declare your assets if you cannot backup your ownership of accounts and property,” Dr Ahmad said very explicitly.
He said that it would be your last chance to whiten your ‘hidden’ money and assets as there will be no more amnesty after June 30. He said the government would freeze the undeclared accounts, and also impose heavy penalties on properties whose money trail cannot be traced. Violators may also face imprisonment of up to five years.
Dr Ahmad clarifies that those who lived outside Pakistan continuously for 183 in a year are considered as NRPs.
“Amnesty is not compulsory but it is a golden chance given by the government to whiten your hidden money as there is now no ‘hiding’ place in the world and there are no tax havens,” he added.
He said the government would have all the information about their assets as more than 28 countries including the UAE exchanged information with Pakistan regarding assets of Pakistanis. This year, the government will have agreement with 72 countries and it would be extended to 104 countries next year. “It means, no one can hide wealth anywhere in the world.
Amnesty scheme, he said, is more focused on Pakistanis living in Pakistan as they will have to declare all their assets and undisclosed bank accounts either in Pakistan or outside the country. “It is a golden chance to whiten and regularise your wealth and assets, so don’t miss the train,” he said.
He said any person except public office holder in Pakistan can avail this opportunity.
Amnesty is not compulsory but it is a golden chance given by the government to whiten your hidden money as there is now no ‘hiding’ place in the world and there are no tax havens.
He also advised NRPs not to get harassed by any government official in Pakistan and launch a complaint with the FBR in case they face any difficulties
He said the purpose the tax amnesty is to allow the non-documented economy’s inclusion in the taxation system and generate much-needed revenue in the cash0-cruch Pakistan.
What is the tax amnesty scheme
The Assets Declaration Scheme came into effect in May 15 through a presidential ordinance, and it offered r a period of 45 days to people for declaration of their undeclared assets, expenditures, and sales along with payment of taxes until June 30.
Under the scheme, assets within the country and abroad can be whitened after paying a rate of four per cent. The whitened cash assets will have to be kept in Pakistani bank accounts before June 30.
For people wanting to keep their whitened money abroad, a rate of 6pc tax will be charged.
For the declaration of real estate, its value will be considered 150 per cent more than the FBR-assigned value to bring it at par with the market rate.
You do not need to declare gold and precious stones, prize bonds and shares, and proceedings pending in any court of law
Applicable tax rates:
Tax will be four per cent on all asserts except domestic immovable properties
Tax will be 1.5 per cent on the total value of domestic immovable properties
For foreign liquid assets not repatriated, you will have to pay 6 per cent tax (NRPs exempted).
More information and to declare assets, visit FBR website: https://www.fbr.gov.pk