ISLAMABAD – President Mamnoon Hussain approved an ordinance on Sunday bringing into effect the tax amnesty scheme recently announced by Shahid Khaqan Abbasi-led government.
The ordinance would formally implement the five-point tax reforms package which included a tax amnesty scheme for undeclared foreign and domestic assets, and reduction in income tax rates.
The prime minister launched the amnesty scheme and reforms package on Thursday in a bid to boost government’s revenue base at a time when the ruling regime falls has merely around 52 days before the next elections are held.
According to the new scheme, which is being decried by PML-N’s political rivals, the Computerized National Identity Card (CNIC) number will be used as the income tax number in the future and public falling in up to 100,000-rupee salary bracket will not be taxed.
Those earning over Rs48million annually will be liable to pay 15 percent tax on their income, according to the scheme, while cash assets abroad could be brought back by paying a two-percent penalty.
Abbasi announced a tax amnesty scheme for nonpayers, however, clarified that politically exposed persons (PEPs) and their families were not eligible to benefit from the scheme. The amnesty scheme is valid till June 30.
Following are main points of the tax amnesty scheme:
- Income up to Rs0.1m per month not taxable
- 10%tax on annual income between Rs2.4-4.8m
- 15% tax on annual income above Rs4.8m
- CNIC to be used as income tax number
- Cash assets abroad can be brought back on payment of 2% penalty
- Foreign assets, which will be brought back, can be declared at lower rates
- Forex accounts within Pakistan will become visible to FBR
- No one without NTN can open forex account
- Anyone receiving remittance over $100,000 in a year shall have to explain source