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FATF being pleased through Asset Declaration Scheme 2019

The Asset Declaration Ordinance (ADO) 2019 has been announced with the aim not to generate revenue but to document the economy in the background of Financial Action Task Force (FATF); revival and growth of economy through tax compliance. This was disclosed by IR Team on 28th June while addressing a Seminar on the Asset Declaration Ordinance, (2019) organized by the FPCCI in collaboration with Inland Revenue Services (IRS), Corporate Regional Tax Office (CRTO) Karachi, FBR with the objective to create awareness amongst the concerned asset holders and potential taxpayers.

The Team added, “ADO, 2019 is also applicable in undisclosed Assets and expenditures and sales and provides immunity from proceeding Under Section 111 of ITO 2011; the deadline will not be extended beyond 30-06-2019; tax can be paid in installment subject to default surcharge; Gold Jewelry, bearer prize bonds, securities, etc., are not required to declare, open plots, local immovable property etc., can be declared at higher cost of acquisition or 150% of FBR value or 150% of DC Value ; availability of carry forward facility of stock on 30-06-2018 to 2018-19 etc.

In a query about rental income originated from Dubai-based properties IR CRTO team replied that double taxation treaty overwrote the domestic law and the UAE clearly stated that tax on rental income is charged by the country where income is originated hence rental income from Dubai-based properties are declarable but not chargeable in Pakistan.

Regarding a query on Power of Attorney, it was replied that all immovable properties, which were transferred on power of attorney, would be declared as Benami property under the ADO, 2019 as the objective of the Scheme was to allow inclusion of non-documented economy in taxation system and to promote economic revival and growth by encouraging tax compliance.

During awareness session, the IRS CRTO team led by its Chief Commissioner Shafqat Ali Kehar and consisting of Maqsood Jehangir, Commissioner IR Zone-IV, CRTO and Kashif Hafeez, Additional Commissioner IR Zone IV CRTO Karachi, made a multimedia presentation and elaborated salient features of the Assets Declaration Ordinance, 2019 and gave replies to various queries, ambiguities etc., as raised by the participants.

The participants expressed their problem in filing of asset declarations due to none/ partial functioning of FBR’s portal (IRIS). They proposed for allowing Provisional Declaration of Assets by 30th June, 2019 and elaborated that the Scheme was announced only 45 days ago and as such the declarants who are not in a position to deposit cash due to liquidity crunch and filed declaration before 30-06-2019 may be treated as provisional and the assessees may be allowed to deposit the cash in bank accounts within 90 days. They also proposed that at least 15 days may be allowed to incorporate or feed the declaration data in relevant Income Tax and Sales Tax Returns/ profiles particularly when IRIS is not fully operational and as such it will not affect at all the last date of declaration of assets.       

Earlier, Engr. Daroo Khan Achakzai, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) hailed the Asset Declaration Ordinance (ADO), 2019 and termed it as a right step in the right direction with the objective to bring tax evaders under the tax net; enhancing the country’s revenue base; documentation of economy; arresting the size of ever increasing black economy; mobilize resources and to bring dead assets in the mainstream of economy and make them functional. FPCCI Senior Vice President, Dr. Mirza Ikhtiar Baig and Vice Presidents Muslim Mohamedi, Arshad Jamal, Kareem Aziz and Syed Mazhar Ali Nasir, Advisor to the President & Immediate Past SVP of FPCCI, Abdul Hafeez Muhammad, Shakeel Dhingra, Shaheen Ilyas Sarwana etc., also attended the session.

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