The Federal Board of Revenue (FBR) in a crackdown on tax evasion through foreign bank accounts have said that offshore tax evasion will now be a punishable offence, carrying the criminal penalties of hefty fines and jail time up to three years.
A circular issued by the board said that the move was in line with the Finance Act 2019, and would help choke out the remaining tax evaders in the country. The changes are also in line with the recommendations of the Financial Action Task Force (FATF).
The amendments introduce various changes to the legal framework governing tax evaders, absconders, abettors, officials and individuals involved in malpractices and real estate transactions.
The government has set a penalty of Rs100,000 or an amount equal to 200 per cent of the tax evaded involving an undeclared offshore asset.
Additionally, any person who fails to declare an offshore asset to the income tax commissioner or furnishes inaccurate particulars of an offshore asset and the revenue impact of such concealment or furnishing of an accurate particular is Rs10m or more will commit an offence punishable on conviction with imprisonment up to three years or with a fine up to Rs500,000 or both.
For purposes of the law, any person that owns, possesses, controls, or is the beneficial owner of an offshore asset and does not declare or under declare or provides inaccurate particulars of such asset to the income tax commissioners will be considered an offshore tax evader.
