Hidden foreign currency can also be legalised: FBR

[Naveed Yaseen]

ISLAMABAD: Federal Board of Revenue (FBR) announced Friday that hidden foreign currency in cash could also be legalised on payment of 2 percent investment tax. However, benefits of the scheme would not be available to the taxpayers whose cases were pending before department, appellate authority or any court.

The FBR has issued circular No 8 of 2008, amending the Investment Tax Scheme, 2008 announced through circular No 3 of 2008.

The benefits of the scheme shall accrue to the taxpayer in terms of its Para 2 (b) for any tax year or years ending on or before 30th June 2007.

Under the Investment Tax 2008 Amnesty Scheme announced in budget 2008-09, undeclared cash, bank deposits, bonds, shares, securities, jewelry, plant, machinery and stock in trade, vehicles, plots, buildings for residential, commercial and industrial use and all other hidden assets would be legalised on payment of 2 percent investment tax.

Existing as well as new taxpayers have been given a 6-month deadline to declare their hidden assets irrespective of moveable or immoveable from July 1, 2008 to December 31, 2008 and pay one time 2 percent investment tax.

All new as well as existing taxpayers would be allowed to legalize the hidden moveable and immoveable assets under the said scheme. The value of the un-declared assets would be the fair market value to be determined by the taxpayer itself, under-self assessment scheme.

Para 2(b) has been amended as under. “Unexplained income/assets” means any asset for which the taxpayer has no explanation regarding nature and source and was chargeable to tax but could not be so charged under Income Tax Ordinance, 2001, for any tax year or years ended on or before 30th day of June, 2007 ”

It has further been clarified that the term ‘cash’ as mentioned in Para A of part – I of the Annexure to the said Scheme shall include cash in foreign currency. However, for the purpose of calculation of 2 % tax payable thereon, the amount shall be converted into Pak rupee at the foreign exchange rate prevalent as on 30.6.08.

Circular No 08 OF 2008 which amended the Investment Tax Scheme, 2008 stated that the Federal Board of Revenue is pleased to make the following amendments in the Investment Tax Scheme, 2008 announced through Circular No. 3 of 2008 dated 01-07-2008, namely:- (i) In Paragraph-I after sub-paragraph (ii) the following new sub-paragraph shall be added. (iii) The scheme shall not apply to the cases where proceedings are pending before the Department, Appellate Authority or any court. (ii) In Paragraph 2(b) for the figure “2008” the figure “2007” shall be substituted. It is further clarified that the term “Cash” mentioned in Para A of Part-I of the Annexure to the said Investment Tax Scheme, includes cash in foreign currency also. For the calculation of 2% tax payable thereon, the amount is to be converted into Pak rupees at the exchange rate as on June 30, 2008.

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