Tax authorities at the Cooperate Regional Tax Office (CRTO) said Wednesday that taxing the taxpayers with foreign assets would be a slow process and one should not expect an overnight advancement on this front.
Talking to Business Recorder, the sources at CRTO confirmed dispatching of tax notices on the basis of information received from United Arab Emirates (UAE) and United Kingdom (UK). They said the number of tax notices is not very huge as the tax authority are processing notices on the basis of information supplied to them from the central office i.e. the Federal Board of Revenue (FBR).
Sources said the legal procedure starting from sending of notices and ending up on the opportunity of appealing to the relevant legal forums would have to be exhausted before tax collection from the taxpayers with foreign assets. They added that tax notices are being dispatched to the taxpayers on their local postal addresses. It will be followed by the opportunity of appearing of taxpayer in person or through his legal representative to clarify his position regarding disclosure of the asset in his tax return. Rather, the tax inspectors will make sure that the taxpayer in question is already filling his income tax return or not, and if not he would be allotted with a national tax number (NTN), followed by filing of a return regarding foreign assets.
They said most of the cases of foreign asset belong to the Musharraf era when a large number of Pakistanis invested in the residential schemes announced and developed in UAE and other destinations, including UK. Chances cannot be ruled out that a taxpayer has already disclosed his assets in his annual return. Sifting of data on the basis of the information provided by the taxpayer in question would be a lethargic and cumbersome process, as the FBR does not have the authority to inquire about the assets of a taxpayer prior to last five years.
Sources also made clear that the shareholders in the public and private limited companies are major focus of the tax authorities so far as foreign assets are concerned. These shareholders may have transferred their profits abroad to purchase assets while showing their companies in losses in their financial books, they added.
Similarly, the sole proprietors from amongst the wholesalers and traders may have also bought assets abroad through their real estate agents. All these potential tax evaders would be on the radar of CRTO in the months ahead, they added.
It may be noted the tax experts are objecting the term "plundered money" for the purchase of assets abroad by the government representatives in their press talks. They said holding a foreign asset through general investment out of taxed money of a taxpayer cannot be dubbed as a purchase of asset through plundered money. It may be noted the immediate past government of PML-N had offered an amnesty scheme to the Pakistanis with foreign assets, giving them opportunity to declare them in Pakistan against a negligible tax rate of minimum 2% to a maximum of 5%. Former Advisor to Prime Minister on Revenue Haroon Akhtrar has told a private TV channel that the beneficiaries of this scheme have declared billions of dollars assets but brought back only a few million of dollars in cash, which shows their mistrust on the system.
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