Pakistan’s government has confirmed that it has registered around 100,000 new tax filers and expects to have raised about $450 million from a tax amnesty on hidden assets, the finance chief has said.
The announcement came a day after the International Monetary Fund gave final approval to a $6 billion loan package designed to shore up the economy while the government cuts debt and builds up dwindling foreign currency reserves.
Finance chief Abdul Hafeez Shaikh said nearly 137,000 people had registered at the closure of the amnesty this week, of whom nearly 100,000 were first-time filers. That was a significant total in a nation where less than 1 per cent of the 208 million population file tax returns.
In total, around Rs3 trillion ($19.25 billion) of assets were declared and tax revenue worth around Rs70 billion was collected.
Prime Minister Imran Khan introduced the amnesty on undeclared assets, part of a broader drive to widen Pakistan’s notoriously narrow tax base, in a bid to identify high earners for more efficient tax collection.
The move represented a turnaround for Khan who had accused previous governments of using amnesties to legitimise illegally acquired wealth hidden inside Pakistan and abroad.
Under the IMF agreement, approved on Wednesday, Pakistan has undertaken to drastically increase revenue mobilisation by 4-5 per cent of GDP at federal and provincial level over three years. Hafeez Shaikh said the IMF agreement would open up more funds from other lending agencies and help the broader economy. “Pakistan’s economy will stabilise, and we will take on the path of progress.”
He had said recently that the priorities are to safeguard the economy and stabilise it, fix financially-weak institutions, improve foreign relations and giving incentives to the rich and compel them to pay taxes.
The government has set a target of raising Rs5.55 trillion ($35.6 billion) in tax this year, an ambitious goal given that it missed a previous target of Rs4.4 trillion by over Rs500 billion.