ISLAMABAD: Nearly 55,225 people have filed returns declaring their Rs577 billion worth of foreign assets and Rs1,192bn domestic assets under the tax amnesty scheme, new data released by the finance division on Wednesday shows. The declarants have paid around Rs97bn in taxes thus far with more in the pipeline.

The break down showed that the government received a tax amount of Rs36bn on whitening of foreign assets and Rs61bn on domestic assets. In addition, $40 million has been repatriated. This response to the amnesty schemes has been unprecedented.

The last date for the tax amnesty scheme has already been extended until July 31.

An official statement said the amnesty scheme for foreign assets applied to both liquid and immovable assets such as bank accounts, shares and mortgaged properties. Tax rates range from two per cent to 5pc, depending on the type of asset. Special tax rate of 2pc is applicable to liquid assets which are repatriated into Pakistan.

Govt receives tax amount of Rs36bn on whitening of foreign assets and Rs61bn on domestic assets

The amnesty scheme for domestic assets covers all types of assets and income, with tax rates of 2pc and 5pc.

For payment of tax on foreign assets, the State Bank of Pakistan has devised a procedure, whereby tax in US dollar is deposited into SBP’s account through wire transfer.

The government has issued Government of Pakistan’s US Dollar Denominated Amnesty Rules, 2018, whereby the SBP has been authorised to issue these bonds having a maturity period of five years and annual profit of 3pc to be paid semi-annually.

According to the rules, the citizens of Pakistan can invest in these bonds out of remittances declared under the foreign amnesty or through encashment of foreign currency accounts held in Pakistan.

Pakistan has also become a signatory to the OECD Multilateral Convention which will provide access to information about offshore financial accounts of Pakistani residents from September this year. This will enhance the capacity of the Federal Board of Revenue due to access to offshore financial accounts of Pakistani residents held in the signatory countries.

Necessary amendments have also been made to the Protection of Economic Reform Act, 1992, to regulate foreign exchange movements and bring them in line with the Income Tax Ordinance, 2001.

Moreover, amendments have been made to the Income Tax Ordinance, 2001, whereby the FBR may inquire about the source of foreign remittance above Rs10m and limitation of five years to probe foreign assets and income has been removed.

Published in Dawn, July 12th, 2018