Islamabad (April 05, 2018): The Prime Minister Shahid Khaqan Abbasi has announced the amnesty scheme for those who are not paying income tax amid to increase tax base and revenue.
Addressing a press conference in the federal capital after a meeting of the Economic Advisory Council ended earlier today, said a decision had been taken to introduce a five-point amendments package on income tax.
He said that the lower number of tax payers were causing problems, therefore the amnesty scheme was an effort to increase tax collection.
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“The overseas Pakistani will only pay two percent penalty under amnesty scheme,” he said adding that the people who had foreign currency accounts can only pay five percent tax.
He also mentioned that the people who generate monthly income upto one hundred thousand will be exempted from tax.
He announced a tax amnesty scheme for nonpayers, however, clarified that politically exposed persons and their families were not eligible to benefit from the scheme. The amnesty scheme is valid till June 30.The prime minister said that the Computerized National Identity Card (CNIC) number will be used as the income tax number in the future. He stated that income up to Rs0.1million per month will not be taxed.
Abbasi further said that those earning over Rs48million annually will be liable to pay 15 percent tax on their income. He added that cash assets abroad could be brought back by paying a two-percent penalty.
“Income tax has been reduced to make tax payment more sustainable,” he said. “At the moment, the [maximum income] tax percentage stands at about 30 per cent. However, after much discussion, we have decided to bring that percentage down drastically,” the prime minister said.
“People who make less than Rs100,000 [a month; Rs1.2 million a year] will now be exempt from paying taxes. People who make between Rs1.2m to Rs2.4m will be liable to pay five per cent in income tax,” he explained.
The income tax for the Rs2.4-Rs4.8m bracket will be 10pc. PM Abbasi added: “Those earning over Rs4.8m annually will be liable to pay 15 percent tax on their income.”
“The third point in these reforms is that we are introducing a tax amnesty scheme through which people with assets within the country will be able to bring them within the tax net by simply paying a five per cent penalty,” the prime minister said.He added that people who hold undocumented assets outside the country will be able to bring their money back to the country by paying a 2pc penalty.
“People who take part in the amnesty scheme will be given a one-time exemption from accountability and other laws,” the prime minister explained. However, he stressed that politically exposed persons and their families will not be able to avail the amnesty scheme.
Moving on to point four, the prime minister said: “On any property that a citizen purchases, they will have to pay a two per cent ‘pre-emptive tax’. That tax will be adjusted in their annual taxes.”“To avoid under-invoicing [in property sale and purchase deeds], the government now holds the right to buy any property that a citizen holds by paying 100 per cent over its declared price,” he warned.
“Lastly, the government will be able to now monitor all financial transactions that citizens make so that they do not evade tax,” the prime minister said, explaining that the government is able to monitor all financial transactions and will send notices to non tax-paying citizens and tell them to explain their financial situation.
“We do not want to send the police to anyone’s home or alert the Federal Board of Revenue, but our citizens need to be responsible and pay their taxes,” PM Abbasi stated.