'Asset Declarations Scheme' deadline extended till July 3

ISLAMABAD: Keeping in view the increasing interest of the people towards Assets Declaration Scheme (ADS), the government on Sunday extended its last date till the office hours of July 3 (Wednesday) to facilitate them to declare their undeclared assets and secure themselves from impending complications.

The extension in the ADS deadline was announced by Advisor to the Prime Minister on Finance, Revenue and Economic Affairs Dr Abdul Hafeez Shaikh here at press conference.

He was flanked by Special Assistant to the Prime Minister on Information and Broadcasting Dr Firdous Ashiq Awan, Minister of State for Revenue Hammad Azhar and Federal Board of Revenue (FBR) Chairman Shabbar Zaidi.

“The Asset Declaration Schemes has been witnessing a lot of interest at the last minute…., so it is extended till the office hours of July 3,” the advisor said while briefing the media persons on the objectives of budget for the fiscal year 2019-20.

Abdul Hafeez Sheikh appealed to the people to take benefit of the scheme in their own interest as the government had already established the ‘Benami Commission’, which was mandated to go after the Benami properties.

Dr Hafeez Shaikh said under the Benami law, there were heavy penalties and severe punishment for those holding Benami properties.

“Since the Assets Declaration Scheme is in its last stage, so I appeal to the  citizens, whether they are inside Pakistan or abroad, to take advantage of it,” he said. It was an easy way to bring the taxable hidden income into tax net, he added.

The advisor expressed the hope that the International Monetary Fund (IMF) board would approve $6 billion extended fund facility for Pakistan.

He said Pakistan would also get $3.4 billion from the Asian Development Bank (ADB), $2.1 billion of which was expected during the upcoming fiscal year (2019-20) while the country was also hopeful for assistance from the World Bank.

He said since the external loans were provided on low interest rates comparatively, so they were cost-effective and did not create much trouble in repayments.

The advisor enumerated five key areas that had been focus of the budget for the fiscal year 2019-20. Those included overcoming the external threat (current account deficit and trade deficit), taking austerity measures, protecting the vulnerable segments of society, protecting the interest of industrialists to help economic growth and mobilize revenue (Rs 5.5 trillion).

He said the economy was facing crisis situation when the incumbent government took over. It had to face many challenges on external front in terms of current account deficit, trade deficit, and debts to the tune of Rs 31,000 billion, including foreign loans of $100 billion.

In order to overcome the situation, tariff on imports, particularly luxury goods, was increased and same policy was carried out in the upcoming budget, he said, adding  resultantly the current account deficit had reduced from $20 billion to $13.5 billion.

He said the current account deficit would further be reduced to $7.5 billion during the upcoming year.

The advisor said to overcome the economic challenges, the government mobilized about $9.2 billion in cash from China, Saudi Arabia and the United Arab Emirates. In addition, the $3.2 billion deferred payments facility agreement was signed with Saudi Arabia for oil imports. An agreement of $3 billion was also signed with Qatar, out of which $500 billion had been transferred.

The government, he said, also took austerity measures to reduce its expenditures.

He clarified that the government had to meet some compulsory expenditures as it had to spend Rs 2.9 trillion on debt repayment while 52 per cent of revenues would be transferred to the provinces under the Constitution while it was also bound to spend for the vulnerable segments.

However, the government still reduced the expenditures by Rs 50 billion and did not increase the pays of government employees (1-16 grade) beyond 10 percent, and that of 17-20 grade employees by 5 percent and no raise for grade 20 and above employees.

Moreover, the allowances of cabinet members had been cut by 10 percent, while the budget for PM House was also reduced.

He said the funding for social protection programmes had been almost doubled from Rs100 billion to Rs191 billion.

The advisor said in order to protect common people, the government had allocated Rs216 billion for providing subsidy to the consumers utilizing upto 300 electricity units while the neglected areas like the erstwhile FATA had been given special heed in the budget with allocation of Rs152 billion for their uplift.

Despite financial difficulties, he said, the Public Sector Development Programme allocations had been enhanced form Rs575 to Rs925 billion and again the projects of neglected areas had been prioritized.

He said the industries would be provided subsidized gas to help industrial growth that would help generate jobs. In addition, the import of around 1650 tariff lines had been zero-rated to make the country’s products compatible in international market, he added.

He, however, clarified that there would be no tax on export-oriented products. If the same products were sold in local market, tax would be implemented.

The advisor said it was matter of satisfaction that the process of democracy was moving ahead. Some 225 National Assembly members had delivered speeches during the budget session and the opposition was given more time as compared to the treasury benches.

He said the finance bill was given proper consideration by the Senate, and its finance committee.

He said the supplementary grants had been reduced to Rs220 billion from Rs600 billion last year, where the excess budget of seven years was also cleared.

Replying to a question, Hammad Azhar said during the year 2019-20, the government would have to pay Rs 2.9 trillion on account of debt servicing while during the previous fiscal year (2018-19), it had retired principal external debt of $10 billion along with interest.

He said the major thrust the budget was that the government had reduced taxes on inputs while increasing taxes on finished luxury goods.

To another question, Hammad Azhar said the government was transferring the burden of taxes to the services sector as well. "Until now, the industrial sector was the major contributor of tax revenues, but henceforth, a large number of untaxed people belonging to the services sector, including doctors, lawyers, information technology professionals and others will be brought into the tax net," he added.

FBR Chairman Shabbar Zaidi said without broadening the tax net, the revenues could not be improved.

"Capacity extension depends upon availability of data and not the existing tax filers," he added.

He said under the Assets Declaration Scheme, about 80,000 new people had become tax filers.

Hammad Azhar said the scheme was a great success as it was attracting huge number of people to declare their assets and each hour, thousands in numbers were entering into the tax net. A huge quantity of hidden assets had been declared so far.

He said majority of the new tax filers were small businessmen, shopkeepers, jewelers, and others, who were doing businesses worth of billions of rupees but were untaxed.

Shabbar Zaidi said the Benami Commission would be operational from July 1 and would be fully mandated to take actions against the Benami property holders. He urged the people to take advantage to the scheme to avoid any legal prosecution.

To a question with respect to reforms in the FBR, Zaidi said major reshuffling in the bureau was avoided due to the budget and then Assets Declaration Scheme. However, work on the reforms would be initiated in next week.

He said by next week, the process of sales tax registration would be made quite easy and a person would not need help of any expert to fill in the registration form.

Moreover, by August , filing of tax return would also be made easy to facilitate the filers, he added.