Sunday, January 29, 2023

Govt simplifies tax laws for Roshan Digital Accounts


KARACHI: The federal government has introduced several amendments in the Income Tax Ordinance 2001 through Tax Laws (Amendment) Ordinance 2021 to make the taxation regime simple, convenient and hassle-free for Non-Resident Pakistanis (NRPs) maintaining Roshan Digital Accounts (RDAs). 

According to a statement issued by the State Bank of Pakistan (SBP), the amendments have simplified and reduced tax compliance costs for the NRPs maintaining RDAs.

The amendments have extended the coverage of the full and final taxation regime to:

(a) dividends and capital gains on shares and mutual funds investments made through RDAs,

(b) capital gains on real estate investments made through RDAs.

As a result, overseas Pakistanis holding Roshan Digital Accounts will not need to file tax returns against their income.

With this removal of return filing requirements, NRPs having RDAs have also been insulated from penalties (doubling of tax rate) due to their absence from the Active Taxpayer’s List (ATPL).

Further, NRPs with RDAs will not be subject to tax on cash withdrawals and bank transfers that are applicable on non-filers.

Read More: PM thanks overseas Pakistanis for sending in US$500m via Roshan accounts

The capital gains on shares and mutual funds are also taxed at 15 percent, the same rate that is applicable on filers.

Earlier in the day, Prime Minister Imran Khan expressed gratitude to the overseas Pakistani citizens for the abundant response in making his initiative Roshan Digital Accounts a success with 87,833 accounts signed up from 97 countries.

In a tweet earlier today from his official Twitter account, the PM noted that only within five months since the initiative was launched, US$ 500 million have been channeled into the accounts.

Roshan Digital Accounts

According to the SBP statement, the simplification of the taxation regime will give a further boost to the Roshan Digital Account scheme, which has already attracted considerable inflows from NRPs in the five months since it was launched.

The RDA is a flagship initiative of State Bank aimed at connecting overseas Pakistanis with Pakistan’s banking and payment system. Looking ahead, the SBP will continue its efforts towards making the policy, regulatory, business and taxation environment around RDA investor-friendly


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