PM Announces Amnesty Scheme for Foreign Assets
Prime Minister Shahid Khaqan Abbasion Thursday announced tax reforms. The five-point package includes:
1. CNIC numbers to be made NTN numbers to monitor tax compliance of all citizens.
2. Income tax brackets and percentages to be revised. Complete tax exemption on annual income up to Rs1.2m; maximum percentage of 15pc to be levied on income above Rs4.8m per annum.
3. Undeclared assets held locally or abroad to be declared after payment of nominal penalties. Those who avail the scheme are to be granted one-time exemption from accountability laws.
4. Tax to be collected on all property transactions to be made uniform. Government to have the right to purchase any property by paying 100pc over and above its declared value within six months of its registration.
5. Government to monitor citizens' financial records and issue notices if they find evidence of tax evasion. Penalties to be decided in parliament.
Foreign liquid assets like cash, securities and bonds held abroad and in local dollar accounts may be declared with a 5pc penalty.
Dollar account holders in Pakistan who have purchased dollars with undeclared funds can also regularise them on 2pc payment.
"People in this country, unfortunately, believe that paying income tax is an option. This is not true: evading taxes is a criminal offence," he explained.
"Last year, only 0.7m people paid taxes and most of those did not have an option since they were salaried employees. This is an unsustainable situation."
"In usual circumstances, people in a higher income bracket pay a larger amount of taxes and people in lower brackets pay a lower amount. However, when this does not happen, undue burden falls on citizens through indirect taxation, which is unfair."
"Seeing this, we decided to come up with these radical tax reforms as paying taxes is the biggest responsibility of any citizen."
"These reforms are simple and easy, for the convenience of our citizens," he stated.
The government previously used 12 tax brackets for salaried individuals and eight for self-employed individuals to calculate their income tax liabilities. These have now been simplified to four.
"Income tax has been reduced to make tax payment more sustainable," PM Abbasi announced. "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," he revealed.
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