Voluntary Declaration of Domestic Assets Act of 2018: Beneficiaries being questioned by FBR?

ISLAMABAD: The declarations filed by the individuals, who availed the amnesty scheme, under the Voluntary Declaration of Domestic Assets Act of 2018 have been questioned by the field formations, which require a stern warning of the Federal Board of Revenue (FBR) to the field officials to stop scrutinizing contents of the amnesty declarations despite prohibition under the said Act otherwise no one will trust the recently announced Construction Package.

Tax experts told Business Recorder that the Amnesty Declaration filed under the Voluntary Declaration of Domestic Assets Act of 2018 are being called in question by the field formation contrary to the express prohibition contained in section 3 of the Act that "the provision of this Act shall have effect notwithstanding anything contrary contained in any other law for the time being in force" and further assurance given in section 8(2) of the Act that no tax shall be payable by the Declarant under any law for the time being in force including Income Tax Ordinance, 2001 where tax has been paid in respect of undisclosed income and undisclosed domestic asset declared under the scheme.

When contacted, Shahid Jami, tax lawyer, explained that the FBR had given so much sanctity to the declaration that despite filing of the same through 'IRIS' system, it was not visible to the assessing officer. Through these Amnesty Declarations, the domestic assets as on 9th April 2018 were required to be declared and taxpayers were entitled to incorporate the effect of the declaration in their books of accounts, as well as, in the wealth statement for the period ending on 30th June 2018. Now, if a taxpayer claims the benefit of Amnesty Declaration in respect of proceedings up to the period 9th April, 2018 not only the taxpayer is required to provide the copy of the Amnesty Declaration the effect of which is appearing in the Wealth Reconciliation Statement as on 30th June 2018 rather its contents are also being scrutinized and further details and documents are being requisitioned.

He explained that the officers are requiring to provide a year-wise bifurcation of the declaration though the Declaration Form required to disclose the consolidated position as on 9th April 2018. Rather, during the currency of filing of declaration various questions of the taxpayers were explained by the Board through FAQs on its website wherein FAQ No 11 pertained to year-wise bifurcation of the declaration and FBR answered that consolidated single declaration is required pertaining to different years.

He pointed out that understanding from officer to officer varies and at Large Taxpayer Unit (LTU) Lahore officers are verbally seeking a lot of information regarding declaration.

Copyright Business Recorder, 2020