After much deliberation, the government has announced its tax amnesty scheme — Asset Declaration Scheme — after it was approved by the cabinet on Tuesday.

Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh briefed the media on the scheme. He was accompanied at the presser by Federal Board of Revenue (FBR) Chairman Syed Shabbar Zaidi, Minister of State for Revenue Hammad Azhar and Special Assistant to the Prime Minister (SAPM) on Information and Broadcasting Dr Firdous Ashiq Awan.

"We have tried to make this scheme very easy to understand and implement," the adviser said at the news conference, adding that the scheme has realistic targets with low rates.

"The basic purpose of the scheme is not to generate revenue but to document the economy and to bring dead assets into the economy and make them functional."

The philosophy behind the plan is not to "intimidate" people but to encourage businessmen to participate in the legal economy, the adviser said.

He said people will have the opportunity to become part of the scheme until June 30. Every Pakistani citizen will be able to avail the scheme except for people who have held a public office and their dependents.

Under the scheme, the finance adviser revealed, assets within the country and abroad (except for real estate) can be whitened after paying a rate of 4 per cent. The whitened cash assets will have to kept in Pakistani bank accounts.

For people wanting to keep their whitened money abroad, a rate of 6pc will be charged.

For the declaration of real estate, its value will be considered 1.5 times more than the FBR-assigned value to bring it at par with the market rate, Dr Shaikh announced.

The amnesty scheme also has the facility for citizens to whiten their benami accounts and properties before the Benami Transaction (Prohibition) Act, 2017, is enforced.

Responding to a question, Dr Shaikh said the IMF programme entered into by Pakistan is in favour of the country. "Those who are opposing the IMF programme are the ones who had already done the same," he added.

He said actions such as reducing the gap between imports and exports, reducing losses of state-owned entities and curtailing expenditure are in favour of the country.

Dr Shaikh said some people were apprehensive that the electricity tariff will be increased under the IMF accord. He clarified that if that is done, those who consume less than 300 units will not be affected.

"Pakistan has been going to the IMF again and again because it failed to increase its exports, foreigners remained reluctant to invest in the country, large state institutions remained loss-making and revenue mobilisation was not done [effectively]."

Answering a question about how this scheme is different from the ones offered in the past, state minister Azhar said unlike the past amnesty schemes, the one being introduced now makes it mandatory for people declaring assets to become tax filers.

He said the scheme was not being offered to generate revenue and contains an option for businesspersons to revise their balance sheets.

In what Azhar termed as the rectification of a "major mistake" from the last amnesty scheme, people will now be required to deposit all of their cash in hand into the bank and declare it along with the deposit slip as proof.

'Fine-tuned' tax amnesty

Prime Minister Imran Khan chaired the cabinet meeting during which the scheme was approved.