FAISALABAD: The tax amnesty scheme has received 10 times more response as compared to the previous scheme and Federal Board of Revenue (FBR) is still updating final figures of its beneficiaries and tax collected under this scheme.
Addressing a third awareness session on Tax Amnesty Scheme-2018, Withholding Tax Director General Mehmood Aslam Lillah said that placing Pakistan in grey list by Financial Action Tasks Force (FATF) has forced strict monitoring of the capital movement while 143 countries under an international convention are bound to pass on bank accounts and bank transactions of foreigners through an Automatic Exchange of Information System.
He said that these two factors have particularly made it impossible to conceal assets or accounts in other countries.
In this scenario, the TAS is most appropriate and in time measure as people could register their undeclared assets by paying just 2 to 5percent taxes.
He said that some elements were reluctant to pay 5percent on foreign assets and were expecting that this rate would be slashed down. However, caretaker government has declined to do so, saying that it is not within its mandate except extension of one month in this scheme.
He told that frequently asked question based on apprehensions and reservations regarding TAS have been uploaded on FBR website. Similarly its helpline is also remained operative on weekly offs of Saturday and Sunday. Moreover, focal persons have also been nominated in all Regional Tax Offices to redress the people’s concerns regarding this scheme.
Mehmood Aslam said that business community and FCCI had been vehemently demanding extension to this scheme but he clarified that the people’s response before June 30 was tremendous but it remained sluggish after this date.
Responding to a question, the DG Withholding Tax said that in prevailing circumstances there is no chance of any new TAS and hence people should avail from this excellent opportunity to bring their undeclared assets into their books of accounts.
Regarding another question to allocate revenue collected under TAS for education or health sector, he said that FBR was only a collecting agency while another department has assigned powers to decide the spending of this revenue.
However, he added that revenue collected from TAS has not been included in the annual recovery targets of FBR and a separate account has been maintained for it. He said that Pakistan is facing actuate financial crisis. Our foreign exchange reserves have been squeezed and these could pay the import bill of only one month.
He said that the ultimate objective of this scheme is not to generate revenue as government wanted mainstreaming of undeclared assets.
Commenting on a proposal that NTN should be declared mandatory for new commercial electricity connections and if the applicant fails to file returns next year, his connection should be discounted immediately, he said that it is a good proposal but it could be included it in next year budget.
Regarding the valuation of the properties purchase many years ago, he told that a clear formula has been mentioned in the scheme under which the land rates will be determined in according to the prevailing DC or RTO rates, however, the cost of structure could be determined at the rate of Rs400 per square feet.
About abolition of withholding tax, he said that it is not possible, however; minor adjustments in it could be made in according to the prevailing needs.
He told that out of total population of 220 million, only 1.3 million file their tax returns. Among these 0.6 million are salaried persons while remaining 0.7 million belong to the corporate, non-corporate and AOP entities.
Regarding withdrawal of withholding tax on bank transactions, he said that its ultimate objective was to broaden the tax-base but it could not yield required results due to different reasons.
Earlier in his address of welcome, Shabbir Hussain Chawla President FCCI welcomed the extension in TAS and said that Pakistanis have approximately 150 billion dollars assets abroad. Out of which 40 billion dollars have been invested in real estate sector.
He said that if government succeeded in bringing back half of this amount; it will help Pakistan to generate sufficient funds to meet our domestic needs.
He said that more awareness session should also be arranged to fully exploit the potential of this scheme.
He also stressed the need that government and policy makers should plug the loopholes in our system to check the flight of capital.
A question answer session was also held in which Chaudhary Tallat Mehmood, Chaudhary Asghar, Rana Sikandar Azam and Mehmood Alam Jutt raised interesting questions.
Later, Shabbir Hussain Chawla presented FCCI shield to Mehmood Aslam Lillah Director General Withholding Tax FBR while Sheikh Farooq Yusuf offered vote of thanks.