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Govt mulls amnesty scheme to facilitate owners of offshore businesses

The Pakistan Muslim League-Nawaz (PML-N) government has proposed an amnesty scheme to encourage Pakistani citizens with assets and companies abroad to whiten their earnings and siphon profit back to the country, DawnNews reported on Tuesday.

Though details of the amnesty scheme are yet to be released, initial reports suggest that the scheme will enable Pakistanis to whiten their money without having to reveal the source of their acquisitions or earnings, even if it was earned illegally from within Pakistan.

However, the scheme is yet to be finalised and approved.

The Securities and Exchange Commission of Pakistan (SECP) also supports the proposed amnesty scheme, DawnNews reported.

According to initial reports, the amnesty scheme, if passed into an ordinance, will be valid for somewhere between six months and a year.

Pakistani citizens who declare their offshore assets or companies within the first three months and demonstrate that they want to shift their business to Pakistan, will pay a one-time tax of 5 per cent.

They will then be allowed to whiten the money and invest it anywhere in the country.

However, additional taxes will be imposed if any transactions are performed with that money or an income is generated with it.

If Pakistanis declare their offshore assets within six months, they will be asked to pay a tax of 7pc; if they declare after six months but within the year, the tax would be 10pc.

In December 2016, President Mamnoon Hussain had given assent to the Income Tax Amendment Act 2016 to grant legal cover to an amnesty scheme that will allow property owners to whiten money parked in the real estate sector on payment of three per cent tax.

It is pertinent to mention that while the government is mulling options to grant tax amenities, the Federal Board of Revenue (FBR) is facing a shortfall of over Rs100 billion in revenue collection.
‘Amnesty schemes have largely failed’

When asked about the stance of Pakistan Tehreek-i-Insaf (PTI) on the proposed scheme, senior party leader Shah Mehmood Qureshi reserved his comments, saying he does not have enough information about it to form an opinion.

“Many such amnesty schemes have been proposed in the past but they’ve largely failed,” he said, adding that though the current scheme does not seem promising, it is too early for him to comment on it.

However, Awami Muslim League Pakistan Chairperson Shaikh Rasheed outrightly rejected the proposed amnesty scheme, saying it will be yet another failed piece of ordinance.

“I suspect the federal government is apprehensive as there are rumours floating in Islamabad about one or two more offshore companies and properties that may surface in the coming weeks,” Qureshi speculated.

He said the PML-N government is acting in haste and the Pakistani people will not support any such scheme.

Pakistan Peoples Party Parliamentarians Senator Saleem Mandviwalla said amnesty schemes are supposed to be “general” in nature.

“They cannot have a specific beneficiary. That’s not how it is done,” he said.

“Given the current circumstances with Panamagat case, it definitely seems the amnesty scheme is being proposed to benefit a specific sector,” Manviwalla said, adding the Pakistani population does not want anyone siphoning money out of Pakistan illegally to be let off “so easily”.

courtesy : dawn news



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