ISLAMABAD: The outgoing government’s dream to collect three to four billion dollars through the amnesty scheme seems to have shattered as only around Rs20 billion has been sent in by 3580 local and overseas Pakistanis by June 22, 2018
“The government has received Rs8 billion and around Rs12 billion is in the pipeline as sources have stated that people living in Pakistan and abroad are now approaching tax officials to avail this scheme due to increasingly stringent global laws hor having offshore accounts” sources added.
Among the 3580 people, 1680 are overseas and 1900 are local Pakistanis as these people now have become active taxpayers, the sources stated.
People disclosed that they have cash, assets, agriculture land ranging from millions to billions as one person only disclosed Rs15 billion undeclared wealth to tax officials, sources told.
The Pakistanis living in foreign countries disclosed their offshore and undeclared money just because the tax officials will receive information about offshore financial accounts in September 30, 2018.
A Federal Board of Revenue’s (FBR’s) spokesperson, while talking to the media on Friday stated that Pakistan is a signatory to the Organisation for Economic Co-operation and Development (OECD) Convention on Mutual Administrative Assistance in Tax Matters which has been signed by most of the countries around the globe”. The said information of bank accounts maintained by Pakistanis abroad shall be provided by those jurisdictions automatically in the last day of September, he had stated that against this backdrop, amnesty on foreign assets was an opportunity for Pakistanis to declare undisclosed foreign assets at very low rates without incurring any penalties.
It is worth mentioning here that the State Bank of Pakistan on Saturday issued procedures for investing in the US Dollar denominated bonds specially issued for persons availing amnesty to declare undisclosed foreign assets.
Any citizen of Pakistan who has declared his assets under the Government of Pakistan Foreign Assets (Declaration and Repatriation) Act 2018 and the Voluntary Declaration of Domestic Assets Act 2018, will be an eligible investor of the dollar-denominated bonds as per the new rules issued by the new cabinet on Friday.
However, dollar-denominated bonds cannot be purchased against foreign exchange which represents sale proceeds of goods exported from Pakistan, earnings of residents on account of services or earnings or profits of the offices or branches of Pakistani firms, companies and bank working abroad.
As per the SBP’s rules. the maturity of the bonds will be five years from the date of issuance and it will be issued in USD one thousand ($1,000) or multiples thereof with no upper limit on the investment amount.
The profit on the bonds will be three per cent per annum to be paid on a half-yearly basis. Redemption of principle and periodic profit payment will be paid in PKR at prevailing Interbank PKR-US dollar exchange rate (selling side) in the investor’s nominated PKR account maintained with a bank in Pakistan.
With respect to Government of Pakistan (GoP) Gazette Notification No S.R.O.790(I)/2018 dated June 22, 2018, the SBP on Saturday issued detailed instructions for investment in the bonds on Government of Pakistan’s US Dollar-Denominated Amnesty Bonds Rules, 2018.
The State Bank of Pakistan (SBP) will open a Subsidiary General Ledger Account (SGLA) of the taxpayer with the SBP as per the procedure for investment in the bonds through repatriation of foreign assets, upon receipt of funds to be invested in bonds and repatriation of liquid assets under Foreign Assets (Declaration and Repatriation) Ordinance, 2018.
Rhe SBP will issue scrip-less bonds for the US dollar amount (in multiples of $1,000), as advised by the taxpayer and credit the same in its SGLA and accordingly, will send an electronic confirmation to the taxpayer about SGLA number and details of its investment in the bonds issue date, amount, maturity date, etc, to the investor.
The SBP will advise the designated bank to manage the receipt of periodic profit and maturity/redemption payments on behalf of the taxpayer/customer in its designated bank account. For-profit payments, on periodic profit payment date, profit shall be paid in equivalent PKR at Weighted Average Customer PKR-US Dollar Exchange Rate (selling side) of the previous working day. The SBP will credit the designated bank’s current account, maintained with the SBP, with profit amount after deducting income tax (if any), for onward credit to the customers’ accounts.
As per operational instructions, on maturity payment date or premature encashment date, a principal will also be paid in equivalent PKR at weighted average customer PKR-US dollar exchange rate (selling side) of the previous working day.
No encashment is however allowed before the lapse of the first year of investment in the bond. After one year the bond will be encashable at par in equivalent PKR at weighted average customer PKR-US dollar exchange rate (selling side) of one day before the date of encashment.
The date of encashment will be the date on which the request for premature encashment is received by the SBP. For premature encashment, the taxpayer will be required to forward the request to SBP along with a copy of wire transfer, CNIC, NTN, Payment Slip ID and other documents submitted at the time of investment. The SBP will credit the proceeds of encashment in the designated bank’s current account within 02 (two) working days after receipt of a request from the taxpayer. After crediting the designated bank’s account with profit, principal and encashment payments, SBP will instruct the designated bank for onward credit to taxpayers’ PKR account.
The designated bank will credit the amount in taxpayer’s PKR account latest by next working day as per the details provided by SBP and send a confirmation of the credit funds into taxpayer’s account to the SBP.
With respect to a holiday on principal payment date or periodic profit, the payment will be made on the next working day falling after the holiday. In such case, no profit shall be payable for the period of the holidays. No profit will be payable for the broken period, ie, if the bond is encashed before the next six-monthly period, or for holding the bond beyond maturity.
With respect to the receipt of funds that are not in multiples of $1,000, the broken amount (ie, less than $1,000) will not be invested in the bonds. Such broken amount will be converted into PKR and credited to the PKR account of the taxpayer
The SBP reserves the right to accept or reject the application if the necessary requirements under the Act, notification, or instructions are not complied with by the taxpayer.
In case of death of the taxpayer, the payment (principal and profit, if any), will be made to the legal heirs of the deceased taxpayer in accordance with a succession certificate issued by a court of competent jurisdiction.
As per the procedure for investment in bonds through domestic foreign currency accounts, after the declaration of domestic assets and payment of taxes, the taxpayer will approach the bank maintaining its foreign currency account declared under the Voluntary Declaration of Domestic Assets Act, 2018, with Computerized Payment Receipt (CPR)/Payment Slip ID (PSID)
In bonds, the amount will be invested from the domestic foreign currency account declared in Form A under section 7(1) of the Voluntary Declaration of Domestic Assets Act, 2018. The bank, before catering 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 31 March 2018.
Subsequent to remitting the US dollar funds, the taxpayer will be required to provide a copy of wire transfer, or swift message, bearing necessary instructions including specification of the CNIC/NTN of the taxpayer in field 72 obtained from its bank, Form A and CPR/PSID (tax deposit evidence).
Certificate from its bank confirming the availability of balance in the foreign currency account as declared in Form A as of 31st March 2018 will also be submitted.
The amount in multiples of $1,000, to be invested in the bonds and the details of PKR account (bank and branch name, account title, and IBAN) in which the taxpayer would like to have a credit of periodic profit payments and maturity/redemption proceeds on the bonds to be purchased under the scheme.