ISLAMABAD: President Dr Arif Alvi on Wednesday promulgated an ordinance to amend the Income Tax Ordinance 2001 to extend the promotion package for industry and encourage entrepreneurs to invest in industrial undertakings out of their undisclosed assets.

The promotion package is laden with incentives for industrial promotion, revival of sick units and foreign investment in industrial sector.

Under the amnesty scheme, a general amnesty is given to all persons who will declare assets by paying a general tax rate of five per cent by investment in new industries. There will be complete immunity from the probe on amount of investment in new industrial units and expansion and modernisation of existing units.

The minimum investment threshold for availing the amnesty is Rs50 million and the industrial unit is to be set up as a company. It will be binding for new industrial units to start commercial production on June 30, 2024.

Proceeds of crime, corruption, money laundering and terror financing not eligible for amnesty

It was made clear that previous beneficiaries of amnesty schemes of 2018 and 2019 are not eligible to avail of this facility. Moreover, the bank loan defaulters in the last three years are also not eligible for the scheme.

It was categorically stated in the ordinance that any proceeds of crime, corruption, money laundering and terror financing will not be eligible. Similarly, any amount which is subject to any departmental or court proceedings is also not eligible.

The sectors which will not be eligible to avail of the amnesty scheme are arms and ammunition, explosives, sugar, cigarettes, aerated beverages, flour mills, vegetable ghee and cooking oil manufacturing excluding extraction units.

As per details, the person will declare the amount of funds for investment in a new company and file a statement by Sept 30, 2022. The funds will be used for the purchase or import of plants and machinery for the construction of buildings and structures for the industrial undertaking.

The amount declared will be confidential and cannot be disclosed to any authority or court, the Federal Investigation Agency, or National Accountability Bureau by the Federal Board of Revenue. However, there will be no change of ownership of industrial undertaking company prior to June 30, 2026. Moreover, there will be no disposal of assets prior to June 30, 2026.

Almost similar conditions were notified through the ordinance for availing the scheme for investments in existing industrial undertaking for modernisation.

Under the amnesty scheme, an incentive has been provided to the companies acquiring ‘sick industrial units’ to revive them.

Published in Dawn, March 3rd, 2022