The government has announced a whitening scheme for investors through which investors making a minimum Rs 25 million investment to set up an industry in some specific sectors on or after January 1, 2014 in Green Field Industrial Projects will not be asked to disclose sources of income.
Prime Minister Nawaz Sharif unveiled this scheme here on Thursday, saying it would be applicable to attract investment in Green Field Industrial Projects, Captive Power Plants, low-cost housing construction and livestock in the corporate sector, mining and Quarrying of Thar Coal, Balochistan and Khyber Pakhtunkhwa (KP).
The Prime Minister also announced a 15-day extension in the filing of income tax returns up to Dec 15, 2013 and hoped that the measures would help boost investment and lead to economic development.
Sharif said the scheme would not be applicable on investment in arms and ammunition, explosives, fertilisers, sugar, cigarettes, beverages, cement, textile spinning units, flour mills and vegetable as well as ghee and cooking oil, but added that this negative list could be suitably amended in the light of suggestions from the business community.
The immunity would not be available to proceeds of crimes relating to offences under Narcotic Substances Act, 1997, Anti-Terrorist Act 1997, Anti money Laundering Act, 2010.
Before he announcing the scheme, he held military rulers and 1972 nationalisation policy responsible for the current woeful state of economy, saying that the country remained behind the other regional countries on economic front due to frequent military interventions. He said investors were not ready to come to Pakistan because of law and order situation; and he vowed to turn Karachi into a peaceful city in the next few years. The Prime Minister reiterated government''s intention to carry forward the process of dialogue with Taliban saying that there was nothing better than to solve the problem, if possible, through dialogue. The government also wanted friendly relations with neighbouring countries because it was in Pakistan''s own interest; Nawaz Sharif said, adding that his government would make a legislation for the rights of dual nationals.
The Prime Minister said that he was considering a package to put the country on a fast-track economic growth by promoting investment in the country. According to him, investment in "Green Field Industrial Projects" will be immune from any probe or scrutiny of source of investment subject to the condition that each unit is set up on or after January 1, 2014 with a minimum investment of Rs 25 million; and that each unit should create at least 5 jobs.
The scheme would be applicable on; (i) Captive Power Plant established as part of a Green Field project; (ii) low-cost housing construction; (iii) and livestock in the corporate sector;(iv) mining and Quarrying in Thar Coal, Balochistan and KP.
Sharif said that to encourage the taxpayers, the government had decided to issue privilege cards to 100 taxpayers in category of companies (CEOs), AOPs (main shareholders), salaried individuals and non-salaried individuals. The privileged taxpayers would be entitled to use VIP lounge at airports, fast-track clearance at Immigration Counters, issuance of gratis passport, increase in baggage allowance from $500 to $5,500.
The Prime Minister also announced that the government would give excellence awards to top taxpayers in each category and annual dinner with Prime Minister at excellence award ceremonies as well as invitations on the occasion of March 23, August 14 and other state banquets on a rotational basis.
He said that under the existing law, any return filed under universal self assessment scheme (USAS) may be subjected to a detailed audit. Any taxpayer who pays tax 25% higher than the tax paid in the previous year would be immune from audit. Taxpayers who had filed their returns would be given an additional 15 days to file revised returns.
The Prime Minister said that to encourage individuals to file their tax returns it had been decided that they would be immune from penalties, default surcharge and Audit if Income Tax Returns for the last five years or missing returns for the last five years were filed and a minimum tax of Rs 20,000 per Tax Year was paid. Returns filed voluntarily by new taxpayers (those without NTN) to be granted immunity from Audit, penalties and default surcharge and immunity from audit to extend to same number of subsequent years for which returns had been filed and a minimum tax of Rs 25,000 per year was to be paid.
The tax net was being broadened by obtaining information from banks in respect of potential taxpayers and to address the concerns of existing taxpayers the information in respect of existing taxpayers would not be accessed.
The Prime Minister said the provincial governments would be engaged through the Inter-provincial Co-ordination (IPC) and Council of Common Interest forums to create ease in doing business by consolidating, rationalising and minimising the licensing, registration and inspection regimes, avail the facilities associated with the setting up of Special Economic Zones by recommending cases to the Federal Government, Facilitate contract enforcement by setting up Commercial Courts.
He also announced establishment of Minister''s Business Advisory Council, which would meet on a quarterly basis for consultative purposes to make policy input.