ISLAMABAD: The Federal Board of Revenue (FBR) is reviewing various proposals to grant certain benefits to the non-resident or overseas Pakistanis.
Sources told Business Recorder here on Tuesday that if any such proposals are finalised, the same may be incorporated through a Presidential Ordinance for amendments in the Income Tax Ordinance, 2001 (Ordinance).
The purpose of the whole exercise is to facilitate the overseas Pakistanis or non-residents.
A proposal is under examination that the provisions of section 100BA of the Income Tax Ordinance (Active Taxpayers List) may not be applicable to non-resident individual holding Pakistan Origin Card or National ID Card for overseas Pakistanis or a non-resident citizen of Pakistan maintaining Foreign Currency Value Account or NRP Rupee Value Account with authorised banks in Pakistan.
Another proposal is under consideration to promote transactions in buying and selling of property among non-resident citizens of Pakistan, non-resident individual holding Pakistan Origin Card or National ID Card for overseas Pakistanis. It is examined that the tax collected from such seller or buyer under the provisions of Section 236C and 236K of the Ordinance be made as Final Tax Discharge. It is under examination that the exemption allowed from tax to a citizen of Pakistan from income under Clause 78 and to a citizen of Pakistan residing abroad under clause 79 of Part I to the Second Schedule to the Ordinance is proposed to be made available to “non-resident citizens of Pakistan”.
The FBR is also examining that a new section may be applicable to a non-resident individual holding Pakistan Origin Card or National ID Card for overseas Pakistanis or a non-resident citizen of Pakistan who maintain a Foreign Currency Value Account or a NRP Rupee Value Account with a bank in Pakistan for the purposes of investment in debt instruments and government securities or certificates will be liable to withholding of tax on capital gains arising from the disposal of the said instruments by the bank.
The tax, so collected/withheld shall be final discharge of tax liability.
Tax experts said that the non-resident Pakistanis (NRPs) were being provided an opportunity to remotely open an account in Pakistan through an entirely digital and online process without any need to visit a bank branch.
The government had enabled investment by NRPs in Naya Pakistan Certificates (NPCs) issued by the Government of Pakistan, in both USD and PKR, at very attractive risk-free rates.
On NPC, only a 10 percent withholding tax on profits is applicable that is full and final. No filling of tax return is required.
The Sharia-compliant version of the NPC was also available, which was in full conformity with Sharia principles and certified by reputed Sharia scholars.
Resident Pakistanis who have declared assets abroad with the FBR can also invest in USD-denominated NPCs.
Copyright Business Recorder, 2021