A few months ago, the government of Pakistan has launched an initiative in the form of ‘Roshan Digital Accounts‘ to encourage Pakistanis abroad to invest in their homeland are proving fruitful and nearly half a billion dollars through Roshan Digital Accounts (RDA) in five months.
On the other hand, the government has made it easier for immigrants using Roshan digital accounts by amending the Income Tax Ordinance 2021. Prime Minister Imran Khan said in a post on his Twitter account yesterday that he was grateful to Pakistanis abroad who sent 500 million home through more than 87,000 Roshan digital accounts from 97 countries in a span of five months.
Sami A. Tariq, head of research at Pak-Kuwait Investment Company, says that by the end of June, the volume of investment through Roshan digital accounts could reach 1 billion. Meanwhile, the government announced a simple and easy tax system for Roshan digital accounts.
Based on the views of Pakistanis around the world and the recommendations of State Bank Pakistan, the federal government has made several amendments to the Income Tax Ordinance 2021 through the Tax Laws (Amendment) Ordinance 2001 to enable non-residents with Roshan digital accounts (RDA).
To make the taxation system simple, easy and trouble-free for Pakistanis. These amendments have made it easier for non-resident Pakistanis with Roshan digital accounts to enforce tax laws and reduce costs. Non-resident Pakistanis investing in New Pakistan Certificates through their Roshan Digital account were already subject to the full and final taxation, but these amendments expanded the scope of the complete and final tax system which includes the following: (a) Dividends and Capital Gains on Mutual Fund Investments and Shares through Roshan Digital Account, and (b) Capital Gains on Real Estate Investments through Roshan Digital Account.
As a result, tax returns will not have to be filed on investments made through Roshan digital accounts under the above items. With the removal of the requirement to submit tax returns, non-resident Pakistanis with Roshan digital accounts have been protected from fines (doubling of tax rate) for not being named in the Active Tax Payers List (ATPL). In addition, non-resident Pakistanis with Roshan digital accounts will not be taxed on cash withdrawals and bank transfers applicable to non-filers.
Although profits on loans for deposits in Roshan Digital Accounts are tax-exempted, the tax rate on profits from New Pakistan Certificates is 10% for both non-resident Pakistanis and resident Pakistanis declaring assets abroad, and for mutual funds and companies (excluding) For IPPs and tax-exempted companies (which are taxed at 7.5 per cent and 25 per cent, respectively), the return on dividends is 15 per cent.
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