Dubai: Pakistan has extended the deadline for its tax amnesty scheme until July 3 — allowing more time for people to ‘whiten’ their undisclosed assets, including property and bank accounts.
Prime Minister Imran Khan’s Adviser on Finance, Dr Abdul Hafeez Shaikh, announced on Sunday that the deadline for the amnesty scheme, also known as as the Assets Declaration Scheme 2019, has been extended until July 3.
The grace period gives Pakistanis — both living in the country and abroad — three more days to declare their undisclosed assets by paying applicable taxes.
4%Tax on all asserts, except domestic immovable properties
The tax amnesty scheme, launched on May 15, was orginially scheduled to end on June 30, but there has been immense pressure especially from the business community and overseas Pakistanis to extend the deadline as they were confused about the scheme.
Dr Shaikh announced the much-expected decision during a press conference held in Islamabad. He was accompanied by Minister of State for Revenue, Hammad Azhar, and Federal Board of Revenue (FBR) Chairperson Shabbar Zaidi.
“We decided to extend the deadline as there has been a lot of interest in the Asset Declaration Scheme. We are giving people a final opportunity in case some people are still in the process or are facing difficulties wrapping it up,” he said.
All Pakistanis are required to declared their "hidden" assets under the new Assets Declaration Scheme.
Non-Resident-Pakistanis (NRPs) are exempt from paying taxes back home on their income derived abroad.
However, they are required to declare their assets in Pakistan, 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 jail time.
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.
However, NRPs who have proof that they remitted money through legal banking channels to buy properties are not required to declare their assets under the amnesty scheme.
Legal remittance channels
“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,” said Dr Mohammad Ashfaq Ahmad, Director General (International Taxes) at the Federal Board of Revenue.
Dr Ahmad had come to Dubai last week to NRPs about the tax Amnesty Scheme.
Pakistani expatriates had also demanded during the briefing that the government should give them more time to decLare their asserts.
During his visit, he had told the Pakistani expatriates 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 days in a year are considered as NRPs.
What is the tax amnesty scheme?
Under the scheme, assets within the country and abroad can be whitened after paying a tax rate of 4 per cent. The whitened cash assets will have to be kept in Pakistani bank accounts before July 3.
For people wanting to keep their whitened money abroad, a rate of 6 per cent tax will be levied.
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.
Citizens 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 4 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, tax rate is 6 per cent (NRPs exempted)
More information and to declare assets, visit FBR website: http://fbr.gov.pk