ISLAMABAD: The government is likely to empower the Federal Board of Revenue (FBR) to invoke Section 111 (unexplained income and assets) of the Income Tax Ordinance 2001 for taxation of all undeclared Benami assets of non-filers from the year of discovery.
According to the budget proposal (2023-24) of the Reforms & Revenue Mobilization Commission (RRMC) to the government, it is recommended that section 111 of the Income Tax Ordinance needs to be amended in a manner that all undeclared Benami assets be taxed in the year of discovery and the period of limitation on such assets should be applicable from the year they are discovered in. The existing law provides for taxation of foreign assets in the year of discovery for the reason that foreign assets are difficult to identify and track.
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For local assets, there is a separate law which debars holding assets under Benami. However, there is a legal issue on its applicability for the assets created prior to the law.
This proposal would help in broadening of tax base of the country and would increase tax revenue generation from undeclared assets, also deterring concealment of assets for the period of limitation after which they can be easily declared in the Wealth statement, as of now. The estimated revenue impact for the government will be positive, the RRMC added.
Copyright Business Recorder, 2023
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