ISLAMABAD: Pakistan’s government has collected $967.28 million through a tax amnesty scheme that allowed people to declare their hidden domestic and offshore assets by paying a nominal 2-5 percent tax on them.
The scheme was launched by the previous government on April 10, and was scheduled to expire on June 30. The caretaker government extended the deadline to July 31 to allow more people to benefit.
“We’ve had an overwhelming response from people in Pakistan and abroad. The tax amnesty scheme has been successful,” Dr. Mohammed Iqbal, a member of the Federal Board of Revenue (FBR), told Arab News. The scheme will not be further extended, he said.
More than 75,000 Pakistanis have made use of the amnesty, FBR officials said. But senior economist Dr. Athar Ahmed said the government was expecting at least four times more revenue than it collected under the amnesty.
“The potential target of this scheme were Pakistanis who have trillions of dollars in offshore assets, but the tax collection shows only a fraction of them have declared their assets through the scheme,” he told Arab News.
“Pakistan needs to introduce cogent tax reforms to bring the maximum number of people into the tax net,” he said.
“Measures like the amnesty scheme are good in the short term, but provide no relief to the economy in the long run.”
Saqib Hameed, a tax expert who works for a consultancy firm in Islamabad, told Arab News that the amnesty “will definitely help improve Pakistan’s economy, as people who’ve benefited from the scheme have now become permanent tax payers.”
But such schemes are temporary measures, he said, adding: “The authorities need to initiate a wider crackdown against tax evaders and tax defaulters to increase revenue.”