Illegal transfer of funds: Mis-declaration of value declared serious offence

The chairman Federal Board of Revenue (FBR) Shabbar Zaidi said on Wednesday that mis-declaration of value for illegal transfer of funds abroad has been declared a serious offence under the Customs Act, 1969 and can be prosecuted under money laundering offences. Responding to a query on the occasion of post-budget presser, he said that the Finance Bill, 2019 has introduced a new section 32C (mis-declaration of value for illegal transfer of funds abroad) to the Customs Act.
This is a very bold step taken by the government to legally declare mis-declaration of value for illegal transfer of funds abroad as illegal, he explained. Under the said section, he said that if a person overstates the value of imported goods or understates the value of exported goods or vice versa, he or she will be served with a notice within a period of two months from the seizure of goods to show cause as to why such goods may not be confiscated.
Shabbar said the budget (2019-20) has targeted sectors/industries indulging in institutional tax evasion and proposed abolition of systems used for such kind of organised tax evasion in the country.
According to him, the theme of the entire tax policy for budget 2019-20 is based on the fact to change taxation procedures for sectors involved in institutional tax evasion. The FBR has conducted a sectoral analysis and identified sectors which are paying nothing to the national exchequer, he said, adding the analysis covered industry-wise and sector-wise details of taxation and potential of revenue.
The FBR has moved from traditional system to sectoral analysis to figure out which of the industries or sectors are paying less taxes than they should. "We are touching these sectors involved in institutional tax evasion due to existing tax system. The systems have been revised without increasing inflation," he said. "If we would be able to successfully collect revenue from these sectors, we can fill any gap in taxes during 2019-20," he added.
Asked about any taxation on media services, Shabbar said that the government has not imposed any new tax on media services or changed taxation structure on such services.
He said that the companies registered with the Securities and Exchange Commission of Pakistan (SECP) but not paying any taxes would be gradually brought into taxation regime on payment of lower rates like 10 percent, 20 percent and 30 percent in phases. He said that 60 percent of the taxes are coming from withholding and 40 percent is the remaining amount coming from the voluntary payments.