The Federal Board of Revenue has issued a circular, according to which any person who has an undeclared offshore asset, will be liable to a hefty fine or imprisonment or both.
As per the amendments introduced through the Finance Act 2019, the government has set a penalty of Rs100,000 or an amount equal to twice the amount of tax evaded through an offshore asset.
According to FBR, any person who owns, controls or is a beneficiary of an offshore asset and does not declare it, under-declares it or provides inaccurate information would be categorized as an offshore evader.
Any person who does not declare offshore assets or provides an inaccurate value of the asset, who’s tax revenue generation is Rs10 million or greater will be illegal and would have to pay fine of Rs500,000 or would have to face three years imprisonment or could face both.
The commissioners have now been authorized to seize assets of offshore evaders, based on any information of that evader trying to flee the country or trying to dispose of the assets to avoid penalties.
Additionally, any person who aids the evader in any illegal activities, arranges or manages such activities or aids in misdeclarations, can face jail time of up to seven years and can be fined up to Rs5 million.
Moreover, any purchase of immovable property of a market value greater than Rs 5 million or any asset of market value greater than Rs 1 million, can only occur through payment by cross cheque, demand draft, pay order or any other bank instrument. Similarly, any person who purchases an immovable property of a market value greater than Rs5 million through cash will have to pay a penalty of 5% of the value of a property, determined by FBR.
Furthermore, through the Finance Act 2019, the concept of non-filers has been done away with and any person who is not a part of the Active Tax Payers list (ATL) and does not declare assets in the time provided can become an ATL member even after the deadline, by paying a fine, which is Rs20,000 in case of a company, Rs10,000 in case of AoP and Rs 1000 in case of an individual.