The tax amnesty scheme announced by Prime Minister Shahid Khaqan Abbasi has evoked mixed reaction from businessmen, industrialists and political leaders as they foresee far-reaching implications of the scheme on Pakistan's economy and tax structure.
"The amnesty scheme launched by the Prime Minister is an excellent and bold step towards the development of tax system and increased tax net," said Mian Zahid Hussain, president of Pakistan Businessmen and Intellectuals Forum (PBIF), adding that Pakistanis living abroad can regularize their assets and money by paying just 2 percent on foreign exchange repatriated from outside Pakistan, either in rupees or through purchase of bonds.
Mian Zahid said that by paying just 2 percent on undeclared money lying in dollar account maintained in Pakistan, it can be regularized, which is an excellent opportunity. To him, the objective of the scheme is betterment of the tax system and rise in tax net instead of making more revenue for a shorter period. He said it would benefit Pakistan in the long run in a very positive manner as new investment avenues would be opened in the country on the same pattern similar to Dubai and Malaysia.
"Tax exemption granted to people earning up to rupees one hundred thousand monthly is very appreciative measure and will boost up the trade activities in the country," he said.
PBIF president further said that fixing maximum tax rate at 15 percent is another positive step and business community welcomes these measures taken by the Government to strengthen national economy in long run. He said property sector contributes a lot to the national economy; however, under-declaration of property is a serious threat to this sector. He said pre-emptive right of government to acquire such property on 100 percent value is a bold step to stop under-declaration of property.
He said considering the international situation and laws regarding movement and declaration of money and assets, this scheme would be highly appreciated by all those having undeclared assets.
Contrary to the viewpoint of Mian Zahid, president of Korangi Association of Trade & Industry (KATI) Tariq Malik in his nuanced reaction said the amnesty scheme could be supportive for foreign exchange reserves but this was only a short-term solution to the problem of stagnant tax net and foreign reserves. He said foreign reserves of country were near to dry down; hence, in this situation it is expected that amnesty announced for declaration of foreign assets and cash currency would help in bringing back considerable amount of foreign exchange.
United Business Group (UBG) leader S M Muneer sees the tax amnesty scheme as a positive measure.
KATI senior vice president Salman Aslam proposed to the government that for the increase of tax collection, the latter must adopt measures to reform tax regime in the country and facilitate already tax-paying citizens and enterprises.
KATI vice president Junaid Naqi suggested that as government is giving relief to bring back foreign assets to home, in the same spirit measures should be taken to win confidence of overseas Pakistanis for their investment in their original homeland.
KATI's other office bearers also applauded the efforts of Adviser to the PM on Finance, Miftah Ismail, for putting economy on the right track.
"This amnesty scheme isn't the first one nor will it be the last of its kind," said Raza Haroon, secretary general of Pak Sarzameen Party, adding that it may or may not achieve the targets but the fact is our tax base desperately needs to be expanded. He stressed that it is high time to take long-awaited step by imposing tax on agricultural income to include the big feudal lords into the tax net.
"Overseas Pakistanis must be encouraged and given special incentives and relief in tax and administrative approvals/paperwork to invest in Pakistan to increase the foreign direct investment," he demanded and urged the government to announce relief to loyal taxpayers as reward and the export related industry must be patronized and be given incentives to reduce the current account deficit.
The PSP leader said citizens would be happy to voluntarily pay their due taxes if they see the benefits in return such as improved heath services, emergency services, law and order and basic municipal services are provided at their doorstep.
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