KARACHI: Karachi Chamber of Commerce and Industry (KCCI) President Muffasar Atta Malik, while referring to abrupt changes including exclusion of income earned during the current fiscal year from the scope of tax amnesty scheme and revised formula for valuation of foreign assets, stated that both these steps have terribly shaken the confidence of individuals who were keen to avail these schemes, besides triggering anxiety amongst those individuals who have already declared their assets under these schemes but are now fearing arm-twisting by tax authorities.
In a statement issued, Muffasar Malik urged the Chief Justice of Pakistan Saqib Nisar, Caretaker Prime Minister Justice (retd) Nasir ul Mulk and Finance Minister Dr Shamshad Akhter to take strict notice of Federal Board of Revenue’s (FBR) unlawful actions being applied in the Amnesty Schemes through press releases and the response being displayed in shape of Frequently Asked Questions (FAQs) on State Bank of Pakistan’s (SBP) and FBR’s websites.
“With hardly four days left as the Amnesty Scheme ends on June 30, 2018, FBR’s interpretations and self-centred decisions would prove detrimental not only for the Amnesty Schemes but also for the country’s economy which direly needs foreign funds through Amnesty Scheme,” he added.
Muffasar Malik pointed out that although the schemes sounded good in the beginning when they were launched by the previous government but abrupt changes and misinterpretations by FBR which were mostly applied in the guise of FAQs, would terribly affect the fate of these schemes which now seem to be heading towards sheer failure.
The two new clarifications will have sweeping repercussions on Foreign and Domestic Assets Declarations Schemes, which will erode the trust of people who had just started availing them after waiting for more than a month, he added.
He said that FBR’s decision to exclude declaration for the income earned during July 1, 2017, till April 9, 2018, was against the Voluntary Declaration of Domestic Assets Act of 2018 approved by the parliament which clearly states, “Subject to the provisions of this Act, any person may make, to the Federal Board of Revenue…a declaration in respect of undisclosed income and domestic assets acquired before the tenth day of April 2018”.
Muffasar Malik further pointed out that in another disappointing move, the FBR has also introduced a new explanation about the valuation of foreign assets in which it has been stated that Pakistani Rupee value of an asset would be determined by SBP according to the exchange rate on the date of filing declaration which would obviously raise the value an asset acquired many years ago.
After the applicability of these explanations, the effective tax rates for domestic and foreign assets schemes will be considerably higher than the rates approved by parliament, he added.
In such a situation, KCCI president said that the only way out was an extension of at least two weeks to a month in the amnesty scheme through a Presidential Ordinance whereas the FBR should come up with a detailed clarification which must address business community’s concerns and FBR must also strictly refrain from ruining the very essence of amnesty scheme approved by the parliament.
