Amnesty under federal budget: Hidden assets can be legalised by paying 1 time 2% tax

[Naveed Yaseen]

By Sajid Chaudhry
ISLAMABAD: Existing taxpayers as well as persons out of the tax net can legalise their hidden assets by paying one time 2 percent tax under the amnesty announced by the government in the federal budget 2008-09.

They would be required to pay one time only 2 percent tax on their hidden assets and file their normal income tax return in subsequent three years by availing the amnesty.

Muhammad Abdullah Yusuf, Secretary General and Chairman Federal Board of Revenue (FBR) said on Thursday after Post Budget briefing at Planning Commission Auditorium. He said that our effort is to document the black economy by offering opportunity to the existing as well as potential new taxpayers to come forward and contribute in the national kitty for providing relief to the poor. Now there is excuse left for the people having hidden assets to declare them and get them regularised by paying a minimum 2 percent tax. This would provide an opportunity to such people to be a part of the mainstream line of the economy and be immune from any probe of tax authorities.

The federal government would bag Rs 26 billion by increasing GST rate from 15 percent to 16 percent, Rs 6 billion from 21 percent FED on telecommunication services alone.

Terming the tax collection target of Rs 1.25 trillion as aggressive, the chairman FBR said that this would be achieved through revenue measures, tax machinery’s efforts and normal GDP growth in 2008-09.

During the upcoming fiscal year 2008-09 revenue to the tune of Rs 71 billion would be generated through revenue measures announced in the budget, additional revenue of Rs 15 billion to be generated through efforts of the tax machinery and rest of the growth in revenues would be the outcome of growth in the economy.

He was of the view that increase in the GST rate from 15 to 16 percent would not hurt the common man as all the essential items and medicines consumed by this category of population are already exempted from GST. This rate has been increased keeping in view the revenue requirements of the federal government and the nation is now required to sacrifice for the development of the country.

Imposition of capital value tax on stock market might result in decrease in tax collection from the market. Explaining allowing exemption from capital gains tax on stock market, Mr Yusuf said that FBR is already collecting tax from stock market. It was the government’s decision to continue this transaction based tax regime from the stock market for the next two years.

Keeping in view the dangers in capital formation, floatation of new bonds and pressure on stock market, the government extended the exemption of CGT on stock market; this exemption would take the stock market out of the pressures.

Defending the shares of direct and indirect taxes in total taxes he said that at present the share of direct taxes in total taxes stands at 39 percent and indirect taxes at 61 percent. Some 18 years back these ratios were 18 percent direct taxes and 82 percent indirect taxes. He said that in the upcoming fiscal year 2008-09 the tax-to-GDP ratio would increase further by 0.5 percent.

http://www.dailytimes.com.pk/default.asp...2008_pg5_1