ISLAMABAD: Pakistan extended a tax amnesty scheme on Sunday till July 31, allowing people to declare their hidden domestic and offshore assets by paying a nominal 2 to 5 percent tax on them.
The scheme was originally launched by the previous government on April 10 and was scheduled to expire on June 30.
“The Federal Cabinet, on the recommendations of the Finance Minister, has approved an extension of the closing date of tax amnesty schemes for declaration of foreign assets and domestic income and assets till July 31, 2018,” Dr. Mohammed Iqbal, member (inland revenue-policy) of the Federal Board of Revenue (FBR), told Arab News.
A summary was approved on Saturday for promulgation of a presidential ordinance to amend the Foreign Assets (Declaration and Repatriation) Act 2018, and the Voluntary Declaration of Domestic Assets Act to extend the amnesty schemes for offshore and domestic assets.
President Mamnoon Hussain promulgated the ordinance to validate the one-month extension with immediate effect.
He said the extension was made on the request of trade bodies, professional associations and the public since “there has been an overwhelming demand and response which is on the rise.
“The extension was also needed to remove ambiguities through clarifications and explanations required to provide certainty to the general public and to ensure effective implementation of the schemes,” he said.
Iqbal said the scheme had also been extended for a month as those declaring foreign assets faced problems in the payment of tax on foreign assets and repatriation of liquid assets.
“It will help the government in bringing undocumented persons, assets and income into the documented sector,” he said. “Depending on the flows, the scheme has the potential to bring in macroeconomic and fiscal stability in the economy.”
Ex-premier Shahid Khaqan Abbasi claimed at the launch of the amnesty scheme in April that it would broaden the tax base from only 1.2 million individuals to 30 million.
The FBR expected to collect around RS120 billion ($32 billion) in tax contributions from those who have used the amnesty scheme. However, by late Saturday night, only RS75 billion could come in the FBR’s kitty.
Pakistanis were allowed to whiten their hidden local and foreign assets at nominal rates between 2 and 5 percent, depending on whether they are declaring domestic or foreign assets and repatriating these possessions to the country or not.
Economists welcome the extension in the amnesty scheme but also urge the authorities to formulate cogent policies to increase the tax net and catch tax evaders to strengthen the country’s economy.
Dr Ashfaque Hasan Khan, senior economist and ex-adviser to the Ministry of Finance, said the scheme had been successful only because the Supreme Court gave it the go-ahead after properly vetting and reviewing its contours.
“The Supreme Court’s approval helped improve confidence of businessmen and the general public in the amnesty scheme and hopefully the FBR will get sufficient revenue through it,” he told Arab News.
Khan said that if Pakistanis declared their foreign assets through the scheme in large numbers, it would also help improve the country's foreign exchange reserves. “For the first time, businessmen and trade bodies have been taking a lot of interest in the amnesty scheme and this shows its success,” he added.
The apex court had taken notice of the amnesty scheme after the then opposition parties had disapproved of it, but later, in June this year, the court approved it after getting it reviewed by economists and tax experts.
Dr. Athar Ahmed, senior economist, termed the tax amnesty scheme a “blessing in disguise” and said the government had no other option but to announce the amnesty to bring more people into the tax net.
“The authorities had to offer incentives to tax evaders because there was no mechanism in place to hold them accountable for their undeclared local and foreign assets,” he told Arab News.
He urged the government to sign agreements with international bodies and other countries to track down undeclared assets of Pakistanis. “Parliament should enact laws to help relevant authorities locate undeclared local and foreign assets of Pakistanis to strengthen the economy,” he suggested.
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Pakistan extends tax amnesty scheme for another 30 days
Pakistan extends tax amnesty scheme for another 30 days
- Country expects the plan to broaden the tax base from current 1.2 million individuals to 30 million
- The government extended the scheme on Sunday till July 31, allowing people to declare their hidden domestic and offshore assets by paying a nominal tax on them
Russia awaits an answer from the US on New START as nuclear treaty ticks down
- Russian leader Vladimir Putin has proposed keeping the treaty’s limits
- US President Donald Trump has said Putin’s proposal sounded ‘like a good idea’
MOSCOW: Russia on Wednesday said it was still awaiting a formal answer from Washington on President Vladimir Putin’s proposal to jointly stick to the last remaining Russian-US arms control treaty, which expires in less than two months.
New START, which runs out on February 5, caps the number of strategic nuclear warheads that the United States and Russia can deploy, and the deployment of land- and submarine-based missiles and bombers to deliver them.
Putin in September offered to voluntarily maintain for one year the limits on deployed strategic nuclear weapons set out in the treaty, whose initials stand for the (New) Strategic Arms Reduction Treaty.
Trump said in October it sounded “like a good idea.”
“We have less than 100 days left before the expiry of New START,” said Sergei Shoigu, the secretary of Russia’s powerful Security Council, which is like a modern-day politburo of Russia’s most powerful officials.
“We are waiting for a response,” Shoigu told reporters during a visit to Hanoi. He added that Moscow’s proposal was an opportunity to halt the “destructive movement” that currently existed in nuclear arms control.
Nuclear arms control in peril
Russia and the US together have more than 10,000 nuclear warheads, or 87 percent of the global inventory of nuclear weapons. China is the world’s third largest nuclear power with about 600 warheads, according to the Federation of American Scientists.
The arms control treaties between Moscow and Washington were born out of fear of nuclear war after the 1962 Cuban Missile Crisis. Greater transparency about the opponent’s arsenal was intended to reduce the scope for misunderstanding and slow the arms race.
US and Russia eye China’s nuclear arsenal
Now, with all major nuclear powers seeking to modernize their arsenals, and Russia and the West at strategic loggerheads for over a decade — not least over the enlargement of NATO and Moscow’s war in Ukraine — the treaties have almost all crumbled away. Each side blames the other.
In the new US National Security Strategy, the Trump administration says it wants to reestablish strategic stability with Russia” — shorthand for reopening discussions on strategic nuclear arms control.
Rose Gottemoeller, who was chief US negotiator for New START, said in an article for The Arms Control Association this month that it would be beneficial for Washington to implement the treaty along with Moscow.
“For the United States, the benefit of this move would be buying more time to decide what to do about the ongoing Chinese buildup without having to worry simultaneously about new Russian deployments,” Gottemoeller said.
New START, which runs out on February 5, caps the number of strategic nuclear warheads that the United States and Russia can deploy, and the deployment of land- and submarine-based missiles and bombers to deliver them.
Putin in September offered to voluntarily maintain for one year the limits on deployed strategic nuclear weapons set out in the treaty, whose initials stand for the (New) Strategic Arms Reduction Treaty.
Trump said in October it sounded “like a good idea.”
“We have less than 100 days left before the expiry of New START,” said Sergei Shoigu, the secretary of Russia’s powerful Security Council, which is like a modern-day politburo of Russia’s most powerful officials.
“We are waiting for a response,” Shoigu told reporters during a visit to Hanoi. He added that Moscow’s proposal was an opportunity to halt the “destructive movement” that currently existed in nuclear arms control.
Nuclear arms control in peril
Russia and the US together have more than 10,000 nuclear warheads, or 87 percent of the global inventory of nuclear weapons. China is the world’s third largest nuclear power with about 600 warheads, according to the Federation of American Scientists.
The arms control treaties between Moscow and Washington were born out of fear of nuclear war after the 1962 Cuban Missile Crisis. Greater transparency about the opponent’s arsenal was intended to reduce the scope for misunderstanding and slow the arms race.
US and Russia eye China’s nuclear arsenal
Now, with all major nuclear powers seeking to modernize their arsenals, and Russia and the West at strategic loggerheads for over a decade — not least over the enlargement of NATO and Moscow’s war in Ukraine — the treaties have almost all crumbled away. Each side blames the other.
In the new US National Security Strategy, the Trump administration says it wants to reestablish strategic stability with Russia” — shorthand for reopening discussions on strategic nuclear arms control.
Rose Gottemoeller, who was chief US negotiator for New START, said in an article for The Arms Control Association this month that it would be beneficial for Washington to implement the treaty along with Moscow.
“For the United States, the benefit of this move would be buying more time to decide what to do about the ongoing Chinese buildup without having to worry simultaneously about new Russian deployments,” Gottemoeller said.
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