Real estate and amnesty for offshore company
Pakistan has joined as the 111th member of the OECD in 2012 the Global Forum on Transparency and Exchange of Information for Tax Purposes.it will participate in the peer review process which encourages all countries to adopt effective exchange of information in tax matters.
Extracts from the mission statement of OECD
Drawing on facts and real-life experience, we recommend policies designed to improve the quality of people’s lives. We work with business, through the Business and Industry Advisory Committee to the OECD (BIAC), and with labour, through the Trade Union Advisory Committee (TUAC). We have active contacts as well with other civil society organisations. The common thread of our work is a shared commitment to market economies backed by democratic institutions and focused on the wellbeing of all citizens. Along the way, we also set out to make life harder for the terrorists, tax dodgers, crooked businessmen and others whose actions undermine a fair and open society.
Countries committed to the implementation of OECD’s Common Reporting Standard (CRS) on automatic exchange of financial information, which will allow governments to exchange information on foreign citizens that hold assets in their banks. For example, Pakistan will be able to see which of their citizens have money in bank accounts in Dubai, UK, Switzerland etc and whether or not they’ve made this known to authorities. This will allow governments to assess whether their citizens are hiding undeclared wealth abroad.
In 2014 Pakistan’s finance minister staggered the nation by admitting that approx 200 Billion USD of Pakistani money is stashed away just in swiss banks. This does not account for the illegal money in UK, Dubai and US which are the other 3 biggest safe heavens for the illegal and corrupt mafia in Pakistan. However it seems the present Government has a plan to encourage the evaders to bring back the money and it may implement it soon. The world is tightening noose around the tax evaders and corrupt, so this may be a good time to provide amnesty to them and bring the money back before it becomes 100% Government property. The leading newspapers THE NEWS published the story on 24th December about a one-time amnesty scheme for offshore companies.
It is sure that some thing is cooking up and it will have a huge effect on the economic health of Pakistan. In the absence of industrial development and other sectors a lot of this money will be invested in real estate sector. For the sake of comparison foreign direct remittance in Pakistan is around 15 to 20 Billion USD annually and about 40 to 50% of this is being invested in real estate every year. This will be peanuts as compared to the investment which will come to Pakistan in case this amnesty scheme is introduced. Some estimates suggest that the Government is eyeing atleast 50 to 100 Billion USD in just six months under the amnesty scheme.
The real estate sector of Pakistan is really close to one of its biggest dramatic uptrend in decades and i can almost smell it. The biggest gainers will be the commercial properties and huge chunks of land.
Our advise is very simple, buy property now or buy it later but buy it before it is too late.
Investment Consultant and CEO at Imlaak
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