KARACHI:The
State Bank of Pakistan (SBP) has launched dollar-denominated bonds
worth $1,000 each for overseas Pakistanis declaring their hidden assets under the tax amnesty scheme expiring on June 30.
“The rate of profit on the bonds shall be 3% per annum to be paid
semi-annually (in rupee-denomination),” a SBP notification said on
Saturday.
The rules for the investment in the government of ‘Pakistan US
Dollars Denominated Amnesty Bonds, 2018,’ suggest asset declarants may
invest any amount (in multiples of $1,000) in the bond for a maximum
period of five years.
However, there will be a cap on the investment if the declarants would
invest in the bond using a foreign currency account being operated in
any bank in Pakistan.
“The bank, before catering to the request, must verify that the amount
being requested by the taxpayer for investment in bonds is not more than
the balance in the domestic foreign currency account as of March 21,
2018,” the notification said.
Investors are not allowed to en-cash the bond in the very first year of the investment.
“There shall be no encashment of bonds before the lapse of first year of investment. However, after one year, the bond
will be encashable at par in equivalent Pakistani rupees at weighted
average customer rupee-US dollar exchange rate (selling side) of one day
before the date of encashment,” the notification said.
“No profit shall be payable if encashment is made before the due date
of the six-monthly profit payment or on holding of bonds beyond the
maturity period (of five years),” it added.
“The payments of profit shall be subject to tax as per provisions of the Income Tax Ordinance, 2001 (XLIX of 2001),” it said.
Redemption of principal and periodic profit payment shall be made in
Pakistani rupees at prevailing inter-ban rupee-dollar exchange rate in
the investors’ nominated rupee-based account maintained with a bank in
Pakistan.
In April, the previous PML-N government introduced the amnesty scheme
offering overseas and resident Pakistanis to declare their hidden
assets at nominal tax rate of 2-5% of the total value of their assets.
The scheme is aimed at increasing foreign currency reserves, widening the tax net and documenting the economy.
The Federal Board of Revenue (FBR) is estimated to receive up to $4 billion in tax under the amnesty scheme.
Pakistan’s reserves dropped to critical level of less than two months import cover at $10.26 billion on June 14, 2018.
The reserves have depleted fast due to exorbitant imports, sluggish exports and insignificant workers’ remittances.
FBR Chairman Tariq Mehmood Pasha warned of a crackdown from September
1 against those overseas Pakistanis who fail to explain assets after
June 30.
He said Pakistan has signed multilateral convention agreement with
102 counties to exchange information regarding their citizens having
hidden assets in any of the signatory countries.
“As a test case, Pakistan sent a list of 100 Pakistanis to the Dubai
tax authority to seek information about their assets there. In the very
first week, the tax authority provided complete information about 55 of
them, including information about property size, its location and
value,” he disclosed.
At the same time, several countries are legislating to scrutinise
unknown assets to stop terror financing around the world. The move will
pinpoint those who are not able to explain their assets globally,
including Pakistanis.
Source
