Ordinances issued for economic reforms

islamabad — President Mamnoon Hussain has issued four ordinances to implement economic reforms which seek to increase the tax base and help people declare their hidden assets at home and abroad.

The ordinances, promulgated on Sunday, include Voluntary Declaration of Domestic Assets Ordinance 2018, Foreign Assets (Declaration and Repatriation) Ordinance 2018, Income Tax (amendment) Ordinance 2018, and Economic Reforms (amendment) Ordinance 2018.

The Economic Reforms Package (ERP) was announced by Prime Minister Shahid Khaqan Abbasi last week who had said that the focus of the new scheme was to facilitate taxpayers and expand the tax net to at least three million people from less than 1.2 million in a population of 207 million, Dawn reported.

The ERP envisaged “one-time” amnesty scheme to whiten the undeclared assets, reduction in income tax rates, issuance of dollardenominated bonds and barring cash transactions in non-filer accounts.

The government has issues a list of public office holders who cannot avail the amnesty scheme. The list includes the president, prime ministers, governors, chief ministers, nazims, councillors, government consultants and judges of the higher and lower courts. Those facing litigation will also not be able to avail this facility.

Through the ordinances, the government has increased the threshold for income tax exemption to an annual income of Rs1.2 million from Rs400,000.

Tax rates on higher income brackets have also been substantially reduced. As such, annual income between Rs1.2 million and Rs2.4 million will attract a tax rate of five per cent, while the tax rate will be 10 per cent on an annual income of Rs2.4 million to Rs4.8 million. Any income beyond Rs4.8 million will attract 15 per cent tax rate.

Besides, a one-time amnesty has been offered to those not paying taxes at present to become taxpayers and whiten their assets by setting aside their past.