Govt to give amnesty for setting up new industrial units

KARACHI: The government is providing an amnesty, to be announced through a presidential order, for setting up industrial units, sources in the Federal Board of Revenue (FBR) told BOL News.

In his address to the nation on February 28, 2022, Prime Minister Imran Khan announced a big relief package of reducing prices of petroleum products and electricity tariff. Besides, the prime minister also announced a scheme for the promotion of industrialisation in which the source of investment will not be asked.

The FBR officials said a person intending to make investment in a new industry would not be asked about the source of funds subject to certain conditions.

“The amnesty will be available at 5 per cent payment of income tax on the funds to be invested,” an official said on the condition of anonymity.

However, the person intending to avail the scheme would file a statement of income by September 30, 2022, declaring the amount of funds, which have not been declared in any of the income tax returns up to the tax year 2021 filed by December 31, 2021.

Further, the new industrial unit established under this scheme would commence commercial production by June 30, 2024.

The sources said the tax amnesty will cover undeclared funds, which are from any proceeds of crime, corruption, money laundering and terror financing. Further, those funds will also not be entitled for the amnesty scheme, which are involved in any departmental or court proceedings.

The sources said the sectors, which cannot avail the amnesty scheme included arms and ammunition; explosives; sugar; cigarettes; aerated beverages; flour mills; vegetable ghee and cooking oil manufacturing, excluding extraction units.

Besides offering the amnesty scheme, the government was also amending certain provisions of the Income Tax Ordinance, 2001 to facilitate the new investment in the country, the sources said.

The businessmen would be offered to carry forward losses of sick industrial units. Under this scheme, a company, which acquires majority share capital of another company being a sick industrial unit, the acquiring company would be entitled to adjust the loss for the latest tax year and brought forward business losses for a period of three years.

The government is also intended to allow tax credit for foreign investment to promote industrialisation in the country. This facility would be available to a non-resident Pakistani citizen having continued non-residential status for more than five years.

A resident individual having foreign assets declared by December 31, 2021 would also be eligible for the tax credit on foreign investment.

The sources said such resident or non-resident persons are eligible for tax credit in case of investment in a company incorporated on or after March 1, 2022 to set up an industrial undertaking in Pakistan with the equity not less than Rs50 million, with the funds remitted into Pakistan through proper banking channel.