Advanced Taxation

Assignment # 1
Muhammad Abdullah (190024) Sir Tauseef

➢ Question – 1 What is Tax Amnesty.

Answers – The Tax Amnesty is basically an opportunity given to the taxpayers to write off or
clear that amount as an existing liability by paying some amount. In simple words this means
that it is a set up from government to create revenue generating strategy by allowing specific big
taxpayers to pay their due tax obligation ever a limited period of time in exchange from
forgiveness of a portion of certain tax liabilities which can be either interest, penalties, any other
tax liabilities. As in history we have seen that in some cases there can be harsher penalties as
they are eligible for amnesty but rather do not participate but never the less.
Benefits
there some befits to as it grants a type of immunity for the tax payers as the taxpayer would not
pay huge penalties by the amount of unpaid of their taxes whereas government will receive
revenuer from those unpaid taxes.
Problems
There can be some problems or challenges with Tax Amnesty which is that some big players will
take this opportunity to take more profit and avoid taxes as there will be more tax amnesty
scheme in future and can deal with it later but yet for the preauction there are punishment
regarding such acts from the government.

➢ Question – 2 History of Tax Amnesty Scheme in Pakistan.

In past 60 years of Pakistan there have been about 12 amnesty scheme which were implemented.
Some of which are.
The present Government of Pakistan announced the official final date for Asset declaration
scheme 2019 as 3 July. According to this scheme most of the national and foreign resources
(excluding actual property) can be declared assets by paying a total of 4% only, these people
were mostly non-filers and were of middle or lower class...
Here is a brief overview of the amnesty schemes in Pakistan:
• General Ayyub Khan first introduced the tax amnesty scheme during his reign in 1958
which brought 71,000 declarations, 266,183 tax payers, contributed a total of 1.12 billion.
Nevertheless, tax collection remained less then 10% of the total GDP in 1958-1959.
• In 1997 more then RS 142 million was collected through the tax amnesty scheme.

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 • Under General Musharraf in year 2000 there was an amnesty scheme in which almost
79,200 declarations were filed which led to collection of Rps 10 billion.
• In 2001 a new tax amnesty scheme was introduced called “Investment tax on income”,
but only 2.5 billion was collected.
• During the Peoples party tenure in 2008-2012 a lot of concession was given to the tax
evaders to reach the budget target of RS 1,952 billion. Still the target was missed by over
70 billion.
• In 2013, Muslim League Nawaz announced another tax amnesty scheme which only dealt
with assets held within the country.
• The 2016 tax amnesty scheme only brought in 10,000 declarations and contributed only
0.85 billion for the real estate sector.
• In April 2018 by June 30, more then 5000 people in Pakistan had filed returns declaring
all their foreign assets and depositing almost 80 billion in taxes.

➢ Question – 3 Explain the Amnesty Scheme introduced by the

current Government.
✓ Construction amnesty scheme – it is basically for the investors as to grow the pace
thus investing in housing and construction projects with less tax liabilities

As per the government the sources of investment would not be asked or any investment
would not be market except, they should be done through Bank, bank accounts have to be
made to move with the procedure.

✓ New projects and as well as the projects which were abounded can be continued though
this project
✓ The tax can be paid quarterly
✓ Existing projects have to be self-declared as how much percentage they have been
completed
✓ Withholding tax on the purchase of the building is exempted
✓ There is 90% tax forgiveness for low-cost housing projects
✓ Dividend paid by a builder or developer will not be subjected to tax liability
The date of amnesty scheme was till December 2020 nut there is an extension of six months in
this amnesty scheme as the government wants to facilitate those who want to invest their untaxed
money thus increasing the revenue for the government.
As what it lacks is that the only the elite would be getting benefit from where as the common
man or any business man would not as who would want to invest large sum of money in such
scheme and thus be taxed which is of course the thinking of a common man as they would not
get any benefit from it but this scheme has provided about 1083 projects worth about 340 billion
rupees along with 292 projects estimated about 43 billion rupees. Well on later date there has
been a relief from the FBR as those have submitted their asset declaration and have taxed their
money but have not filed declaration.

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References
✓ https://www.dawn.com/news/1645663

✓ https://infocus.pk/construction-amnesty-scheme-is-a-dream-or-

drama/?utm_source=rss&utm_medium=rss&utm_campaign=const

ruction-amnesty-scheme-is-a-dream-or-drama

✓ https://www.dawn.com

✓ https://www.geo.tv/latest/369937-amnesty-scheme-fbr-allows-

people-to-file-declarations-till-sept-25

✓ https://pkrevenue.com/salient-features-of-amnesty-scheme-for-

housing-construction-sector/

✓ https://www.thenews.com.pk/print/853788-fbr-rules-out-tax-

amnesty-scheme-for-construction-sector

✓ https://www.fbr.gov.pk/pm-package-for-construction-

sector/51147/152336

The END

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