News
Thursday, November 15, 2012
Cabinet approves plan to ‘whiten’ black money* Rich provided with an opportunity to legalise their undisclosed local, foreign assets by paying a minimal tax
* Persons availing schemes shall have immunity
By Sajid Chaudhry
ISLAMABAD: To provide an opportunity to the rich to legalise their un-disclosed local and foreign assets by paying a minimum tax, the federal cabinet on Wednesday approved Tax Registration Enforcement Initiative, 2012, that is likely to enable authorities bring in the tax net 1.3 million rich in the short term.
The people availing the schemes will also have immunity under the National Accountability Ordinance, 1999, Federal Investigation Agency Act, 1974, Companies Ordinance 1984 and Foreign Exchange Ordinance, 2002. The cabinet considered and approved amendments in the Customs Act 1969, Sales Tax Act 1990, Income Tax Ordinance 2001 and Federal Excise Act 2005 to register non-tax filers to the tax net.
The cabinet was informed that a significant segment of Pakistan’s economy was undocumented. The growing size of the underground economy is not only depriving the national exchequer of its due share but is also acting as a hindrance in economic planning and development. A large number of businesses and individuals who regularly file their income tax returns are avoiding their legal obligations by either under-declaring or not correctly declaring their assets or income.
On the other hand, a large number of businesses and individuals who are required to be registered with the FBR and regularly file their income tax returns are avoiding their legal obligations. The FBR along with NADRA has data about the multiple bank accounts, travels, assets and other details of these non-filers. Based on this data two tax incentive schemes are being proposed by the FBR. The past attempts by the FBR to register them failed as the bureau’s field units unfortunately compromised the data.
The cabinet was informed that the Tax Registration Enforcement Initiative, 2012, has been devised to attempt through a simple scheme, which will be administered through banks along with NADRA under proposed section 120B of Income Tax Ordinance 2001, to register and bring into tax net these non-filers of tax returns. A fixed tax is proposed and provides cover to undeclared income/assets of up to Rs 5 million.
The cabinet was informed that the Investment Tax Scheme 2012 is being proposed to be enacted under authority given in the section 120A of Income Tax Ordinance 200.
Courtesy www.dailytimes.com.pk