KARACHI, Aug 22: The Income Tax Bar Association Karachi (ITBAK) has asked the Federal Board of Revenue (FBR) to come out with clear-cut guidelines for determining the fair market value of assets being disclosed in the ‘Whitener Scheme’.

Though the FBR has already clarified that the fair market value as declared by a taxpayer would be accepted for determining the value of undisclosed assets, the tax bar still feels that this does not inject sufficient confidence to ensure success of the Investment Tax Scheme, 2008.

The ITBAK wants the FBR to lay down pre-determined parameters for valuation purposes of different assets, moveable or immovable, going to be disclosed by a taxpayer in the scheme on paying tax at two per cent.

For residential, commercial and agricultural properties, the bar has suggested that the actual cost of acquisition or value specified for the purpose of stamp duty applicable on June 30, 2008, whichever is higher, should be the value on which a taxpayer should be allowed to pay two per cent tax to whiten his undisclosed or unexplained asset.

Similarly, the FBR should determine the value of shares of listed companies at actual cost of acquisition or as per rates listed on stock exchanges of the country as applicable on June 30. Whereas shares of companies not quoted on stock exchange, the face value or break-up value of the share as on June 30, 2008, may be considered for valuation.

The ITBAK wants the FBR to take actual cost of acquisition of investment in securities and capital instruments, including national saving schemes, postal certificates, bonds and other securities for valuation purposes.

For determining the value of imported motor vehicles for the purpose of amnesty scheme on payment of two per cent tax, the bar has suggested that the CIF value, plus the amount of all charges, customs duty, sales tax, Federal Excise Duty, levies, fees and other duties and taxes imposed thereon up to registration of a vehicle be included in the value.

Similar computation should be made for vehicles purchased from a local assembler or a dealer to determine fair price for amnesty scheme.

The tax bar wants the FBR to assess the value of undeclared gold and jewellery at a flat rate of Rs20,000 per 10 grams upon which two per cent tax be recovered for availing the whitener scheme.

However, the value of jewellery other than gold has been suggested to be assessed at the market rate as on June 30, 2008.

The valuation of stocks in trade and plant and machinery (with proof of purchase) should be determined on actual cost of acquisition. The accounts receivable should be assessed at actual price as on June 30.

Assets held outside the country should also be evaluated at actual cost of acquisition and a proof of purchase or expenditure should also be sought, the tax bar suggested.