The Federal Board of Revenue (FBR) has recommended three phases for the tax amnesty scheme allowing undeclared assets to be legalized.
The three phases of the amnesty scheme will end on June 30, 2019, September 30, 2019, and December 31, 2019 respectively. Moreover, the rate of tax on undeclared assets (other than undisclosed income/ domestic real estate) has been proposed at 5 percent, 10 percent, and 20 percent for first, second, and third phase respectively.
The amnesty scheme is recommended to cover real estate at one, two, and four percent for the three phases at fair market value and it should not be less than the value prescribed by the board under section 68 of Income Tax Ordinance.
Prime Minister’s Advisor on Finance, Revenue, and Economic Affairs, Dr. Abdul Hafeez Sheikh, has directed the FBR to review the recommended amnesty scheme and present a new draft.
The draft shows that the scheme will be launched through a presidential ordinance. Moreover, the undisclosed sales shall be taxable at the rate of three percent of such sales coming under sales tax and federal excise duty.
The board also proposed that any foreign asset declared under this Ordinance will have to be repatriated to Pakistan or invested in Pakistan Banao Certificates before submission of declaration in a way prescribed by the State Bank of Pakistan.
The condition will not apply to foreign assets that represent foreign real estate.