Extension in tax amnesty

THE caretaker government took two important decisions on Saturday. Both indeed are meant to increase the country’s revenues but the one is particularly at the cost of public as the massive increase in the petroleum prices – the second in one month- will add to the woes of common man and push up the inflation rate. The increase was expected given depreciation in rupee but we understand that the caretakers could still give some relief to the masses as the international oil prices are still hovering around $ 74 per barrel.
The second decision of caretakers vis-à-vis extension in tax amnesty scheme by one month, however, is highly welcomed as given the massive response it drew in the last two to three weeks, the extension undoubtedly is all set to draw more money from the so far tax evaders and help bring them to the tax net. Though so far the FBR has not officially released any figure it collected under the scheme but according to some reports the tally has touched the mark of Rs 100 billion. The FBR is expecting that this figure is to further rise as more funds were still in the pipeline based on payment slips issued. In fact stashing of undeclared assets in other countries would not be possible any longer under a multilateral convention and anti-money laundering laws which will come into force on 1st of September, therefore, the businessmen are left with no option but to avail themselves of the scheme. Under the convention more than 102 countries, including Pakistan, are bound to exchange information about assets of foreigners in their respective areas. Hence the scheme has provided an opportunity to businessmen to legalize their undeclared assets that were kept abroad due to different reasons. Instead of increasing the oil prices, we understand the government should have increased the tax rates in the extended scheme as it will have drew significant amount to the kitty. For long, the poor and middle class have been squeezed at the expense of the rich. It is time to do the otherwise.

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