Pakistan collects $967m through tax amnesty scheme

A Pakistani currency dealer counts USD banknotes at a currency exchange shop in Karachi on August 1, 2018. (AFP)
Updated 01 August 2018
0

Pakistan collects $967m through tax amnesty scheme

  • Over 75,000 Pakistanis have availed domestic and offshore tax amnesty scheme
  • Pakistan intends to broaden its tax base from 1.2 million to 30 million individuals

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.”


Oil extends 7% slump from previous day

Updated 29 min 7 sec ago
0

Oil extends 7% slump from previous day

  • Oil markets are being pressured from two sides: a surge in supply and increasing concerns about an economic slowdown
  • OPEC has been making increasingly frequent public statements that it would start withholding crude in 2019

SINGAPORE: Oil markets slipped again on Wednesday, extending losses from a 7 percent plunge the previous session as surging supply and the specter of faltering demand scared off investors.
US West Texas Intermediate (WTI) crude oil futures were at $55.50 per barrel at 0514 GMT, down 19 cents from their last settlement.
International benchmark Brent crude oil futures were down 22 cents at $65.25 per barrel.
Crude oil has lost over a quarter of its value since early October in what has become one of the biggest declines since prices collapsed in 2014.
The slump in spot prices has turned the entire forward curve for crude oil upside down.
Spot prices in September were significantly higher than those for later delivery, a structure known as backwardation that implies a tight market as it is unattractive to put oil into storage.
By mid-November, the curve had flipped into contango, when crude prices for immediate delivery are cheaper than those for later dispatch. That implies an oversupplied market as it makes it attractive to store oil for later sale.
Oil markets are being pressured from two sides: a surge in supply and increasing concerns about an economic slowdown.
US crude oil output from its seven major shale basins is expected to hit a record of 7.94 million barrels per day (bpd) in December, the US Department of Energy’s Energy Information Administration (EIA) said on Tuesday.
That surge in onshore output has helped overall US crude production hit a record 11.6 million bpd, making the United States the world’s biggest oil producer ahead of Russia and Saudi Arabia.
Most analysts expect US output to climb above 12 million bpd within the first half of 2019.
“This will, in our view, cap any upside above $85 per barrel (for oil prices),” said Jon Andersson, head of commodities at Vontobel Asset Management.
The surge in US production is contributing to rising stockpiles.
US crude stocks climbed by 7.8 million barrels in the week ending Nov. 2 to 432 million as refineries cut output, data from industry group the American Petroleum Institute showed on Tuesday.
The producer group Organization of the Petroleum Exporting Countries (OPEC) has been watching the jump in supply and price slump with concern.
OPEC has been making increasingly frequent public statements that it would start withholding crude in 2019 to tighten supply and prop up prices.
“OPEC and Russia are under pressure to reduce current production levels, which is a decision that we expect to be taken at the next OPEC meeting on Dec. 6,” said Andersson.
That puts OPEC on a collision course with US President Donald Trump, who publicly supports low oil prices and who has called on OPEC not to cut production.