The Federal Board of Revenue (FBR) has decided to clamp down on illegal, undeclared offshore assets of Pakistanis after 30 September deadline ends.
“The FBR will launch proceedings against persons having offshore assets based on available data,” an official at Large Taxpayers Unit (LTU) said on the condition of anonymity.
The official said that the people having offshore assets should declare them along with a regular annual return for the year 2019, by the given deadline.
“Any person, (who) concealed foreign assets in their returns, will be punishable under the tax laws.”
As per Finance Act 2018, Section 116A added to the Income Tax Ordinance, 2001, every Pakistani with a foreign income above $10,000 or a foreign asset worth $100,000, is liable to furnish statement of foreign income and assets.
Previously, a lacuna in the Income Tax Ordinance allowed tax evaders to take advantage. However, an amendment introduced through Finance Act 2018 has bound them to file returns and declare foreign assets.
The FBR officials believe that implementation of Section 116A would yield better results of the exchange of information under the Organisation for Economic Co-operation and Development (OECD).
The multilateral treaty, signed in September 2016, allows an exchange of information with several foreign countries, including the Gulf States, for the prevention of fiscal evasion or avoidance of taxes.
As per sources, there are many offshore tax havens where billions of dollars of black money, acquired from drug business or corruption, has been parked.
FBR official said that those who fail to meet the deadline will be dealt with under the domestic laws. Such people would be fined two percent of the foreign income or value of the foreign assets for each year of default.