FBR swoops on undeclared assets as amnesty deadline ends


The Federal Board of Revenue (FBR) has started crackdown against Benami property holders and attached billions of rupees assets one day before expiry of the Pakistan Tehreek-e-Insaf (PTI) government’s tax amnesty scheme that has been availed by 129,000 people.

The FBR has provisionally attached 14 ‘benami properties’ worth billions of rupees that it suspects are owned by people close to Pakistan Muslim League-Nawaz (PML-N) and Pakistan Peoples Party (PPP) but are held in the names of others, according to provisional attachment orders.

These orders have been passed by ‘Benami Transaction’ (Prohibition) Zone-I Islamabad and Benami Zone-III Karachi. The properties have been attached for a period of three months and during this time all the parties will have time to explain their positions before an adjudicating authority.

If  the possession of holding an undeclared property is proved, the government will have the right to confiscate the property. Courts can give up to seven-year rigorous imprisonment to such people and can impose a fine on them equal to 25% of the fair market value of the property.

The Islamabad Zone has targeted six properties owned by a PML-N lawmaker. The Karachi Zone has provisionally attached eight properties that it suspects belong to the Omni Group, show the official documents of the FBR.

The last PML-N government had enacted Benami Transactions (Prohibition) Act 2017 but its rules have been framed by the PTI government about four months ago to make it operational.

Before launching the crackdown, the government had offered tax amnesty scheme to the people at very low rate of 1.5% to 4%. The scheme, which was originally planned to end on June 30, was extended for three days and ended on Wednesday.

“As many as 103,532 people have availed the scheme and another 25,130 have filed the draft returns, bringing the total number to 128,662,” said Shabbar Zaidi. He said the number could touch nearly 135,000. These people paid around Rs 60 billion in taxes.

The FBR has not yet determined value of assets that have been whitened by these nearly 129,000 people. The analysis of these assets will be released by Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh on Friday.

Out of the total declarations filed, nearly 80% were related to domestic assets and 20% foreign assets. The FBR’s initial estimates suggest that about 90,000 non-filers have availed the scheme and most of them are middle and upper-middle income group people.

On back of tax amnesty scheme, the total income tax return filers have crossed 2 million – for the first time. During the past ten days, nearly 95,000 income tax returns have been filed.

The FBR has also extended the date for filing the income tax returns for fiscal year 2017-18 to August 2. This would still allow the people to revise their previous returns by paying 30% penalty as against 4% tax that they paid under the amnesty scheme.

After giving an opportunity to a “Benamidar” and beneficiary of a ‘Benami property’ to present their point of view, the Adjudicating Authority can order to confiscate the property if it is unsatisfied with the replies of the accused persons, according to section 25 of the ‘Benami Act’.

The accused will have a right to appeal before an Appellate Tribunal. If the tribunal rejects the appeal, the aggrieved party will have a right to appeal before a high court within 2 months of issuing the orders.

In case the ‘benami possession’ is established, the courts can award the accused rigorous imprisonment of up to seven years or a fine equal to 25% of fair market value of the property.