Inside Financial Markets

FBR mulling over amnesty for owners of Offshore Companies

Barring politicians and bureaucrats, top functionaries in the government and FBR are contemplating upon different options to grant one-time amnesty scheme anytime next year (2017) to all those who owned offshore companies, assets and bank accounts abroad and preferred to bring back their assets inside Pakistan by paying 2 to 5 percent tax, it was learnt.

Exactly on the pattern of India, Indonesia and many other countries offered their nationals to declare their foreign assets by paying 2 to 5 percent tax, the board thinking is underway at highest level in Islamabad to offer such scheme to Pakistani nationals especially in the aftermath of signing the OECD tax treaty which will enable Islamabad to exchange information on tax matters with over 83 countries.

“Nothing concrete is so far finalised on this account but the government may offer such amnesty scheme to Pakistani nationals who prefer to bring back their assets and money into the country by paying just 2 to 5 percent tax”, top official sources confirmed to The News in background discussions here on Tuesday.

Keeping in view severe criticism from the opposition, especially from Imran Khan-led PTI, the sources said that such amnesty scheme should be barred for politicians and bureaucrats. The politicians will not be allowed to avail any such scheme, so there should be political point-scoring on this issue, said the top official.

As Pakistan will be saying goodbye to the IMF on September 28, 2016 the economic managers will be in a better position to throw light on this amnesty scheme because under the Fund programme, all such schemes are sternly opposed by the multilateral lenders on the pretext that it encourages tax evaders at the cost of honest taxpayers.

In the aftermath of the PanamaLeaks, initially the FBR kept mum but early this month they had issued tax notices to all those who were named in the Panama papers.

The FBR sent out notices to 231 individuals named into PanamaLeaks as just one notice was dispatched to person even if he owned around two dozen offshore companies.

Now top FBR officials believe that they might require amendments into Income Tax law 2001 for empowering them to go beyond five years limits for probing against those who owned offshore companies and assets abroad.

However, without granting full autonomy to FBR, the possibility of holding free and fair probe is expecting too much from the tax machinery but it can become starting point to go ahead in the desired direction in months and years ahead. The FBR sent out notices under section 215 of Income Tax Ordinance.

Under section 216 of the Income Tax Ordinance 2001, the Commissioner may, by notice in writing, require any person, whether or not liable for tax under the Ordinance to furnish to the Commissioner or an authorised officer, any information relevant to any tax leviable under this Ordinance as specified in the notice; or attend at the time and place designated in the notice for the purpose of being examined on oath by the Commissioner or an authorised officer concerning the tax affairs of that person or any other person and, for that purpose, the Commissioner or authorised officer may require the person examined to produce any accounts, documents, or computer-stored information in the control of the person.

The Commissioner may impound any accounts or documents produced and retain them for so long as may be necessary for examination or for the purposes of prosecution. The person from whom information is required, may at his option, furnishes the same electronically in any computer readable media.

Where a hard copy or computer disk of information stored on a computer is not made available as required, the Commissioner may require production of the computer on which the information is stored, and impound and retain the computer for as long as is necessary to copy the information required.

When this scribe contacted to FBR’s spokesman Dr Iqbal last week, he chose careful wording by stating that at the moment no tax amnesty scheme was under consideration at FBR level.

Baqar Hussain

A Wannabe CFO, just had stepped in the corporate sector, willing to explore every aspect here and learn as mush as i can, awareness for those who dont, get the info where ever possible and stay up to date always.

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)