The Federal Board of Revenue (FBR) has estimated to recover roughly Rs 31.5 billion from defaulters of the Tax Amnesty Scheme (TAS) 2008, if 30 percent of the total declarants failed in filing the returns for the subsequent three years. According to the FBR data, over Rs 350 billion worth unexplained/undisclosed assets were legalised under the TAS-2008 with payment of tax to the tune of Rs 7 billion.
Sources told Business Recorder here on Tuesday that the Board is collecting data on the TAS from the field formations based on the actions taken against the beneficiaries of the TAS, who failed to consecutively file returns for three years. It is safely assumed that only 30 percent of the total declarants failed to file the returns for three years, the Board may generate a huge amount of Rs 31.5 billion. However, the exact data would be known after compilation of final figures in the field formations.
The FBR has applied exceptionally low tax rate of 2 percent for the legalisation of the un-disclosed assets and income as compared to standard rate of 25 percent for individuals and 35 percent for companies. The non-compliant taxpayers would be subjected to 25 percent and 35 percent for categories of individuals and companies respectively. Taking into account the statutory rate of 25 and 35 percent, the applicable rate of tax on the basis of full value of unexplained/undisclosed assets would be much higher. As compared to 2 percent nominal tax, individuals and corporate sectors have to pay 25 and 35 percent respectively on income/assets, if the declarants failed to file the returns for the subsequent three years.
On the basis of assumption to collect 25 percent and 35 percent maximum tax on the assets legalised under the TAS-2008 by 30 percent declarants, tax involved would be over approximately Rs 31.5 billion after applicability of standard rate of tax on such income and assets. This would be applicable only in case where the assets were legalised, but the declarants failed to comply with the conditions of the amnesty scheme.
For example, if 70 percent declarants under the TAS have consecutively filed returns, the amount to be collected by imposing full tax on such assets/income would be roughly Rs 31.5 billion from remaining 30 percent non-compliant beneficiaries of the TAS.
Sources said that the TIS had made it mandatory for the declarants to file their income tax returns for three consecutive years. The new tax payers availing this scheme were obliged to file return of income for the tax year 2008 and subsequent three consecutive tax years. The department has not questioned the source of acquisition of assets declared under the scheme for the past years and obligation of filing income tax return, if any, for the last five years.
The FBR is legally empowered to issue notices to the non-filers of returns, who availed the scheme. The department would serve notices to the declarants to file their income tax returns. In case of non-compliance, the FBR has the authority to take full value of unexplained/undisclosed assets, which were regularised under the TIS-2008. The valuation could be done on the basis of fair market value of built up immovable property as determined by the commissioner.
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