LAHORE: A tax to be levied on gifts given to non-family members by taxpayers is under the federal government’s consideration, reported a local English daily.
Last year, a total of Rs102 billion were given away by Pakistanis under the scheme, initially called out as an act of money laundering by the Federal Board of Revenue (FBR). According to an FBR budget proposal for 2018-2019, no income tax will be levied on gifts given to family members, however, standard income tax rate will be charged on the amount disclosed as a gift from or for a non-family member.
The minimum taxable limit has been proposed to be set in the range of Rs1 million to Rs1.5 million, with the proposal still due to go through a final review process before being announced in the upcoming budget.
The FBR believes that the current exemption of income tax on gifts is being exploited by the wealthy individuals who are using it to avoid falling in the tax net or to transfer their assets abroad.
The proposal might have political implications as the former prime minister Nawaz Sharif, who is undergoing trial in the National Accountability Bureau (NAB) on corruption charges,
received Rs1.12 billion as a gift from his son Hussain Nawaz.