Amnesty schemes in offing to bring back billions,

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By Ansar Abbasi, September 26, 2012
ISLAMABAD: The government is all set to launch two tax amnesty schemes in the next few weeks amid alarming reports that Pakistani millionaires, having their accounts in the Western countries, have started receiving notices from their concerned bank administrations for closure of their offshore accounts by October 30, 2012.

Following these tax amnesty schemes, the government also intends to introduce a new whistle blowing law with effect from January 1, 2013 under which a crackdown would be launched against tax evaders on the basis of information provided by any citizen. The informer of a tax evader would be paid around 40% of the hidden assets uncovered by him.

Informed sources confided to The News that many Pakistanis, who hold their accounts in the Western countries including Britain, have already been asked to transfer their money as their accounts would be closed by October 30, 2012. Dual Pakistani nationals and overseas Pakistani workers and professionals do not fall in this category.

Besides Pakistanis, the sources said that the account holders of Iraq, Libya and Iran are also being issued notices for closure of their foreign accounts in the Western countries.Government sources also confirm these reports of offshore bank (Western countries)notices having being issued to Pakistanis and disclose that the FBR, in consultation with NAB, is already finalising two tax amnesty schemes; one for the local tax evaders and the second to attract billions of dollars of Pakistanis from foreign lands.

These sources said that according to the estimation of NAB, Pakistanis have their US$250 billion worth wealth in foreign countries. Other estimates, it is said, show this money even touching US$500 billion.

An expert warned that because of the poor governance and lack of people’s trust in the government, the rupee value is witnessing a sharp decline and in these circumstances, Pakistanis having accounts in the Western countries may invest their money in those countries or transfer it to some other secure regions. He said unless the government gives a big and very attractive incentive and assures these Pakistanis full security, the chances of this money’s transfer to Pakistan are very slim.

One of the amnesty schemes would be meant to attract the nation’s wealth placed in foreign countries. The FBR officials hope that under this scheme, not only the government would earn revenue of several hundred billion rupees but would also help invest Pakistani money in their own country for the benefit of the country and its people.

The second amnesty scheme would focus on those Pakistanis who travel abroad, have their bank accounts, own property but don’t pay any tax. Already 3.8 million such Pakistanis have been identified by the FBR. The amnesty scheme would give such Pakistanis an opportunity to document their wealth by paying just around Rs40,000 per person as tax. This scheme is expected to generate Rs170 billion.

Those participating in these tax amnesty schemes would not be questioned about the source of their income. They would become part of the documented taxpayers’ database besides generating revenue of around Rs170 billion.

The FBR authorities expect that these schemes would help phenomenally increase the number of taxpayers, which is currently very low in Pakistan.

According to the sources, the top bosses of the FBR and NAB are already in consultation with each other to shape up these amnesty schemes in a manner that desired results are achieved i.e. widening of the taxpayers’ net and documentation of the wealth of people as well as the country’s economy. President Asif Ali Zardari, it is said, has already given his go-ahead, in principle, to these proposed initiatives.