Senate Standing Committee on Finance reviewed the Finance Bill 2023. During the review, the committee endorsed an amnesty scheme for overseas Pakistanis, which permits them to import a maximum of $100,000 from overseas per tax year.
To sweeten the pot, the government doesn’t require to disclose the origin of their income. This measure is an attempt by the government to bring in sorely needed US dollars in Pakistan.
During the past few months, the dollar’s value rapidly declined, leading to economic instability and financial strain on the country. This crisis had repercussions, including soaring inflation rates, reduced purchasing power, and increased import costs.
The government implemented measures to address the situation, such as imposing strict currency controls and seeking assistance from international financial institutions. However, the crisis persisted, causing significant challenges for businesses, individuals, and the overall economy of Pakistan.
Abdul Rehman Warraich, the Commissioner of the Securities and Exchange Commission of Pakistan (SECP), explained that according to the Finance Bill 2023, the government had raised the maximum amount of foreign remittance transferred from outside Pakistan from Rs. 5 million to the equivalent of $100,000.
This amnesty scheme applies specifically to section 111(4), which prohibits inquiries about the nature and origin of unexplained income or assets. He shared with the committee that the Federal Board of Revenue (FBR) cannot inquire about the source of investment or income.
The FBR also can’t investigate tax avoidance based on the source of remittance under section 111 of the same Ordinance in 2001.
He also added that with the increase in this limit, there is a higher risk of money laundering, as tax officials from the Federal Board of Revenue (FBR) cannot investigate such cases.
Additionally, the FBR lacks the authority to inquire about the source of the funds, regardless of whether the amount has been acquired legally.