Prime Minister Imran Khan has summoned a meeting on Monday to be briefed on economic affairs including talks with the International Monetary Fund (IMF) and the amnesty scheme.
Talks between the Government of Pakistan and the IMF will continue over the weekend. The two sides held talks in the federal capital on Friday after which the Finance Ministry said they had made good progress in their discussions. Sources in the Ministry of Finance had earlier informed that Pakistan and IMF were close to finalising a staff-level agreement expected to range between $6-7 billion.
According to sources, Prime Minister Imran Khan turned down the draft of a staff-level agreement between the Ministry of Finance and IMF.
Under the proposed bailout agreement, Pakistan would have no choice but to concede to the IMF’s demands to hike power tariffs and taxes and withdraw tax concessions and exemptions — which are among the conditions that the country has accepted to secure the loan.
In April the then Finance Minister Asad Umar announced that the government would roll out a new tax amnesty scheme ahead of the budget for individuals to declare their local and foreign assets.
According to the draft of the scheme seen by Geo News, a tax rate of 5% will be applied on individuals declaring their undeclared assets by June 30, 2019; 10% on individuals declaring assets by September 30, 2019; while 20% tax will be applied on individuals declaring assets by December 31, 2019.
The draft also proposes amnesty for the real estate sector. It proposes 1% tax on individuals declaring their property by June 30, 2019; 2% on individuals declaring property by September 30, 2019; and 4% tax on individuals declaring property by December 31, 2019.
The draft contains a proposal to charge 3% tax on previously undeclared sales, while the scheme will also apply on benami bank accounts.
The government hopes to bring the scheme into effect through a presidential ordinance.
The FBR is currently working out further details of the scheme, which the government hopes to launch during the IMF programme—if the Fund allows its duration to be extended during the bailout programme.
