Minister of State on Revenue Hammad Azhar said Thursday that the amendment made in the Income Tax Ordinance 2001 through Finance Supplementary (Second Amendment) Bill, 2019 relating to the provisional assessment of offshore assets discovered is not an amnesty scheme. According to a tweet of Hammad Azhar, the amendment was not an amnesty scheme. He tweeted, "In fact its the opposite. It enhances powers of FBR for provisional assessment of tax evasion in offshore assets cases."
The state minister also added that no changes have been made in the existing laws related to money laundering and money smuggling, etc. Earlier, the opposition parties raised objection over the amendment to the Income Tax Ordinance, 2000. Senator Sherry Rehman of the PPP tweeted that the name of beneficiary of this clause was obvious - without naming anybody. "The budget with a quiet amnesty clause for undeclared offshore wealth. No prizes for guessing who this will serve... the Senate is still working," she tweeted.
On Wednesday last, PML-N Spokesperson Marriyum Aurangzeb soon after the amended budget was presented, said that FBR has been empowered to regularise any overseas properties under this 'mini-budget'. Tax expert explained that where a concealed asset of a person is impounded by any government agency which, in the opinion of the Commissioner, was acquired from any taxable income, the commissioner has powers to pass a provisional assessment order before making a final assessment. However, the Commissioner shall finalise the provisional assessment as soon as practicable.
The bill proposes where any "offshore asset" is discovered, the Commissioner may issue a provisional assessment order before issuing a final assessment order for the last completed tax year of the person. For example, if an offshore asset is discovered in Tax Year 2019, Tax Year 2018 will be provisionally assessed, he added. Currently, the section 123 (1) of Income tax Ordinance allows the income tax commissioner to issue a provisional assessment order for the last completed tax year regarding concealed asset.
The amendment made in the Section 123 with the addition of clause 1A is -Where an offshore asset of any person, not declared earlier, is discovered by the commissioner or any department or agency of the federal government or a provincial government, the commissioner may at any time before issuing any assessment order issue a provisional assessment order for the last completed tax year of the person taking into account the offshore asset discovered.
Another chartered accountant said that the process of provisional assessment which was earlier limited to assets which could have been impounded has been extended to undeclared offshore assets of any person. This extension has been made in order to encompass the right of provisional assessment on assets which could not have been impounded by the government of Pakistan on account of being held outside Pakistan. This amendment has been apparently made to avoid unnecessary delay in the recovery of taxes due from the offshore assets which have been discovered by the government, he added.
An official of the Federal Board of Revenue said that addition in the income tax law was inclusion of foreign assets under the domain of FBR. "Now after the amendment is approved, the FBR will be able to issue tax notice to such people whose overseas assets were not declared," he said. He said that obtaining details of overseas bank accounts and properties has become legally possible due to Organisation for Economic Cooperation and Development (OECD) and Financial Action Task Force (FATF).
The FBR official said, "Now we can request the home country to block the bank account, transfer or sell the property of the person against whom the tax theft notice has been issued. The person will either pay tax or move to the court and it will eventually discourage flight of ill-gotten money to other countries, besides even the bank details will be shared among the OECD members, which will help probe money trail, etc".
The OECD is an intergovernmental economic organization. It launched a programme in July 2018 to support Pakistan in implementing new international tax standards, with key focus on Tax Inspectors Without Borders (TIWB) to enhance FBR's capacity and also be part of the international efforts to contain tax evasion and movement of that capital to other countries.
Another expert said that the controversy has erupted over the new clause in the Finance Supplementary (Second Amendment) Bill, 2019, allowing tax authorities to issue notices for undeclared overseas properties.
Comments
Comments are closed.