Another Tax Amnesty Scheme on the Cards
In continuation of the Senate Standing Committee' s recent proposal that the government should offer tax amnesty to all sectors of the economy rather than just real estate, the Finance Minister has given a hint that government is already working on a policy. He also stated that a way out could be found for those, who wish to come into the tax net.
According to reports, this policy has been devised to facilitate those Pakistanis, who have stashed their money abroad in form of undeclared assets and are facing increasing scrutiny from tax authorities in foreign countries. This change in stance towards tax evasion has taken place following the Panama leaks.
It is expected that this amnesty scheme, which is being promoted by the government as a mode to generate income for Pakistan by bringing more individuals into the tax net, will benefit those Pakistanis whose names have appeared in the Panama leaks. Under this scheme, the holders of undeclared assets will be able to whiten their money by paying 5%, 7.5% or 10% tax. It is also important to note that this amnesty scheme would be time bound and can be availed within six months.
Moreover, this scheme has been introduced for both local and overseas Pakistanis. On the contrary, if people do not avail this scheme, they will be sentenced to a five year term in jail and will also have to pay penalty, three times higher than the tax payable.
It is notable here that despite the government offering a substantial amnesty to the real estate sector, the number of individuals, who have used this opportunity is quite low. Therefore, the efficacy of this current scheme is also doubtful.