ISLAMABAD: At the fag end of its five-year term, the Pakistan Muslim League-Nawaz government on Thursday unveiled a populist economic reforms package (ERP) envisaging another ‘one-time’ amnesty scheme to whiten undeclared assets at home and abroad, reduction in income tax rates for existing taxpayers and issuance of dollar-denominated bond.
The package was announced by Prime Minister Shahid Khaqan Abbasi without prior approval of the federal cabinet, almost 20 days ahead of the federal budget and 55 days before the PML-N tenure comes to an end on May 31. The package will come into force through a presidential ordinance soon.
Prime Minister’s Adviser on Economic Affairs Dr Miftah Ismail said the package could soon be approved by the cabinet.
• One-time amnesty to whiten undeclared assets • PPP, PTI oppose scheme • Economic Advisory Council distances itself from move
Prime Minister Abbasi was accompanied by Mr Ismail and Minister of State for Information Marriyum Aurangzeb while his adviser on revenue Haroon Akhtar was conspicuous by his absence.
The package was announced soon after the conclusion of first meeting of the newly constituted Economic Advisory Council (EAC) held at the PM Office, but the council led by former finance minister Shaukat Tarin distanced itself from the amnesty scheme. An EAC member told Dawn that the meeting was informed about the scheme, but the council said it had nothing to do with it.
The previous government of the Pakistan Peoples Party had also announced a series of popular measures in its last budget that included reduction in general sales tax rates, salary increases and income tax rate cuts.
PPP Senator Raza Rabbani criticised the amnesty scheme “for whitening black money to the benefit of big business” and said his party would oppose it in parliament.
The Pakistan Tehreek-i-Insaf also rejected the package and warned the potential beneficiaries against availing what it called illegal incentives.
The prime minister declined to comment if he had discussed the package with the Chief Justice of Pakistan when he met the latter a few days ago, as well as other stakeholders like the army chief and political parties, but said no stakeholder could oppose reduction in tax rates and expansion of the tax net.
He said all the previous amnesty schemes targeted revenue collection and hence lost its objectives while the focus of the new scheme was to facilitate taxpayers and expand tax net to at least three million people from less than 1.2 million.
“Unfortunately, the perception in this country is that paying income tax is an option. This is not true, in fact evading tax is a criminal offence,” he said, adding that only 1.2m people in a population of 207 million had filed tax returns last year. About 500,000 of those filing returns actually paid no taxes and 90 per cent of the remaining 700,000 were those who had no option because they belonged to salaried class, he added.