Pakistan Tax Amnesty Scheme & Tax Reform Package Announced
Pakistan Tax Amnesty Scheme & Tax Reform Package Announced: Pakistan economy can only sustain if we pay taxes. Under the new scheme announced by the government, all Pakistanis will be able to declare their unreported income and assets and bring their money into the tax base after paying a 5 percent one-off penalty. Tax dodging has been extensive in Pakistan, where only 1% of the adult population pays tax.
“Pakistan’s tax amnesty scheme follows to all international anti-money laundering laws,” the adviser on finance Miftah Ismail told media sources. He shared that he has received an e-mail from the global money laundering watchdog, Financial Action Task Force (FATF), calling for global needs and the agreed upon guidelines to be respected.
President Mamnoon Hussain has issued the Foreign Assets (Declaration and Repatriation) Ordinance bringing into effect a tax amnesty scheme announced by the prime minister.
Five Points Tax Reform Package
- CNIC (Computerised National Identity Card) number to become NTN tax number
- Reduction of income tax rates:
- Tax exemption on annual income up to Rs1.2m
- 5% tax on annual income between Rs1.2 and Rs2.4mn
- 10% tax on annual income between Rs2.4 and 4.8mn
- 15% tax on annual income above Rs4.8mn
- One-time tax amnesty scheme:
- Citizens can declare previously undeclared:
- Local liquid assets at 5% penalty;
- Foreign cash assets at 2% penalty;
- Assets/fixed property abroad at 3%;
- Dollar accounts can be declared and kept abroad at 5% penalty
- Property sector tax reform:
- Most tax evasion occurs in real estate transactions.
- 1% Advance Income tax on all property transactions
- Advance tax to be adjusted in income tax liability
- Federal govt to recommend maximum 1% local, provincial taxes
- Govt can buy property by paying 100% above declared value
- Monitoring of taxpayers:
- Govt to monitor financial records of citizens and issue notices if it finds tax evasion.
Politically exposed persons (PEPs) and their families were not eligible to benefit from the scheme valid till June 30. The provisions of the ordinance shall apply to all citizens of Pakistan wherever they may be, except holders of public office, their spouses and dependent children.