‘Assets can be legalised by paying 2% tax’

[Naveed Yaseen]

ISLAMABAD: The government under the Investment Tax –2008 Amnesty Scheme, has given a chance to existing as well as new taxpayers to declare their hidden assets ––moveable or immoveable–– from July 1, 2008 to December 31, 2008 and pay one time 2 percent investment tax.

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.

All new as well as existing taxpayers would be allowed to legalise 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 himself.

Federal Board of Revenue (FBR) Tuesday issued Income Tax Circular No 03-2008 to explain the details of the scheme. The circular, copy of which is available with Daily Times, explains that in exercise of powers conferred under section 120A of the Income Tax Ordinance, 2001 the FBR is pleased to introduce the scheme for the declaration of moveable and immoveable assets and payment of Investment tax thereon.

Title and Scope of the Scheme: This scheme shall be called Investment Tax –2008 Amnesty Scheme and the scheme shall apply to all existing as well as new taxpayers.

Definition: Investment Tax means a tax as defined under clause (63) of the section (2) of the Income Tax Ordinance, 2001. Un-explained income and 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 June 30, 2008.

Charge of Tax: Investment Tax shall be payable at 2 percent of fair market value of the asset at the time of declaration of all moveable and immoveable, undisclosed, unexplained investments, assets, as declared by the taxpayers under this scheme, on prescribed form from any time from July-1, 2008 to December 31, 2008.

New taxpayers: New taxpayers availing this scheme shall be obliged to file return of income for the tax year 2008 and subsequent three consecutive tax years. The department shall not question the source of acquisition of assets declared under the scheme for the past three years and obligation of filling incomer tax return, if any, for the last five years.

Incorporation of Unex-plained Income and Assets: Where the declarant has paid tax on his unexplained income and assets in accordance with the scheme, he shall be entitled to incorporate such income and assets in his books of accounts.

Depreciation Allowance: No depreciation allowance in respect of building, plant and machinery or the other depreciable assets declared under the said scheme shall be admissible for any tax year prior to the tax year commencing on or before July- 1, 2008. staff report

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