Tax amnesty


The Foreign Assets (Declaration and Repatriation) Ordinance looks good on paper. After all, it provides that those holding public office are exempt from tax amnesty. Which is another way of saying that they are liable to pay their dues.
So far, so good.
Except that this has been rushed through the books as opposed to Parliament. Indeed, when the presidential promulgation was presented before the Upper house as a done deal — the joint opposition staged a walk-out. PTI chief Imran Khan wants to go one step further and have the Supreme Court strike it down.
Prime Minister Abbasi has touted the tax amnesty scheme as a radical economic reform package given that among its primary focus is widening Pakistan’s tax base by way of lowering income tax rates for individuals. Yet economic experts have pointed out that this is just one part of the picture. For in the absence of additional policy to regulate the country’s Balance of Payments (BoP) it raises important questions on debt-servicing. After all, economics is but a numbers game. And it is all too easy to fudge the books.
When a nation, at the national level for example, boasts of an improved record on the GDP per capita front this is all but meaningless without factoring in human indicators; such as literacy rates or access to healthcare. Similarly, at the global level any talk of ‘trade-not-aid’ for the nations of the Global South is pointless unless debt relief is added into the equation. And in this case, that there is no mention of enforcement does not bode well for the future. For unless this component is fully implemented — any commitment to social justice will go out of the window.
As things currently stand, PM Abbasi is fending off allegations of inviting wealthy tax evaders to whiten ‘dirty’ cash or assets at nominal rates. Thus Pakistanis with offshore assets can bring them into the country by paying a nominal one-off ‘fee’ that translates into 2 percent tax. When it comes to foreign fixed assets, the penalty is 3 percent; increasing to 5 percent for foreign liquid assets such as cash, securities and bonds. There is a three-month window of opportunity to avail all this.