Government decides to Tax Undisclosed offshore Properties/Assests

The government decides to Tax Undisclosed offshore Properties/Assets.

In Finance, Bill 2021 circulated few days a ago and still remains the talk of the town, the government has suggested revising two very critical clauses that deal with serving notices to the people and treating the gift-related transactions.

It has been decided to overlook the maximum time limit of five years to serve tax notices in cases where a person fails to disclose details of foreign income or assets in his tax return,  Dr. Najeebullah  Mali, Chief of Inland Revenue Policy FBR, said during a meeting of the Senate Standing Committee on Finance.

Under the Income-tax, the FBR cannot serve notice in more than five years old cases to a filer and on the other hand, can serve to notice up to 10 years in case of a nonfiler of the income tax return.

However, as per the new amendment bill in Finance bill,  Time limitation shall not apply if the Commissioner (grade 20 officer) is satisfied on the basis of reason to be recorded in writing that a person who fails to disclose his foreign income and assets while filling his tax returns.

As per sources, FBR’s operation Wing has also suggested opening more than five years old cases of foreign assets.

Further, the revenue board has also proposed another amendment to help foreign countries to recover taxes from that Pakistani citizens who have stayed abroad in the past.

Another important factor that the Standing committee was informed about during the session was the amendment to smoothing the legal regime that deals with the tax structure of the Gift’s being given by relatives.

In recent times it has been observed that the Gift option has become an excuse to avoid taxes.

In the currently existing law, gifts are exempted from taxes and a great number of individuals with very high net worth are using these options as suitable means of transferring income, assets, and wealth to avoid taxes.

According to news, FBR said that in the tax year 2020 bout 170 billion amount of gifts were given by the taxpayers, which were waived off from taxes.

Many people used to buy assets with an intent to transfer it in the name of a relative few years later to avoid capital gain tax, As per Mr.Tariq Chaudhary (Member Inland revenue Policy)

Also Read: SBP Increased Policy Rate by 150 Base Points

 

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