A Pakistani, who has failed in Pakistan, combating tax evasion abroad

ISLAMABAD: Talent is universal, opportunities are not. A Pakistani is combating tax fraud in America and Russia using the same technology he earlier employed in Pakistan discovering 3.5 million out-of-tax-net rich individuals.
Unlike the appreciation of his efforts abroad, the data he compiled in Pakistan has been thrown into the dustbin the utility of which could have collected at least $3.5 billion revenue, more than what Pakistan annually begs from IMF the strings-attached loan.
Tariq Malik who faced unceremonial removal from the post of Chairman Nadra was instrumental in locating these tax evaders with the help of technology but failed to inspire dysfunctional FBR for using this gold mine to broaden the tax base direly needed for a country being run on foreign aid and loans.
Negotiation between Nadra and FBR over the terms and conditions for utilizing this data didn’t yield result putting to waste the efforts and energy invested on digging out this prized information.
Meanwhile, Tariq left for America where he is treated as a hot cake receiving government clients from across the globe struggling against the tax evasion. Prominent among them are different states of America and Russian government.
Texas, an American state, collected $600 million in additional taxes by using the same technology; Missouri recovered $624 million in delinquent payments and Michigan is saving one million dollars a day through data integration and data analytics.
As America’s Inland Revenue Service is facing tax refund fraud of billions of dollars annually, Tariq has proposed it a strategy of using evidence of identity of taxpayers to combat with this fraud.
In July this year, he was invited in Moscow as a keynote speaker at OECD’s conference to present an innovative approach to G-20 nations for combating tax fraud and managing secure payments. He is now helping Russian Federal Tax Services in developing a future modern tax system that would be biometrics data driven. Based on data analytics, he is writing a strategy paper to combat waste, abuse and tax fraud for Russian Federation.
“Tears started rolling on my cheeks when I went to address this high-powered forum. Only if we could have helped our beloved country in combating tax evasion,” Tariq said lamenting the indifferent behaviour of successive governments towards this issue posing serious challenges to the integrity of Pakistan.
While in Nadra, Tariq and his team discovered 3.5 million potential taxpayers using predictive model of data analytics. They searched out frequent international travellers (1.61 million), multiple bank account holders (584730), residents of posh areas (56421), well-paid professionals, vehicle owners (19149), residents receiving inflated utility bills (66736) and those having multiple weapon licenses (13201).
Out of them, 2.37 million were not registered for National Tax Numbers (NTNs) to begin with and remaining 1.22 million had NTNs but were non-filers.
Included among them was a famous singer who went abroad 60 times in five-year, had 26 bank accounts, lived in DHA Lahore but was a non-filer. As word spread about this status through social media, he filed tax return, however, declared annual income of Rs. 850000 only.
Another individual who is closely related with a well-placed tax official was also enlisted. He contested 2013 elections; was a frequent foreign traveller and resident of Islamabad’s F-10 sector but used to declare zero taxable income.
A famous spiritual leader who charters a couple of planes every year for flying his disciple-turned-clients for Umra was found having travelled not only to Saudi Arabia but to different western countries 38 times, was operating five bank accounts and three vehicles registered in his name but out of tax net.
This project was completed during the PPP government. Nadra found itself in an awkward position when a doctor from Lahore disputed the information about him through the then finance minister who happened to be his close friend. Upon inquiry, the information NADRA earlier shared about him turned out to be correct, nevertheless, no action was taken.
With almost four-year down the road, the data is still unutilized. Tariq wanted FBR charged a slight percentage of the tax recovery as a fee to be used as a revenue source for Nadra that tax authorities refused to pay.
Another factor resulting in the impasse is Nadra’s mistrust. Background conversation with Nadra officials reveal they fear misuse of data by FBR without credible assurance as tax inspectors can use it for blackmailing instead of revenue collection.
While Tariq is abroad doing the same work for foreign governments, his team is still in Nadra and so is the data. Only thing missing is the lack of will on part of the FBR to use this data for a crackdown on tax evaders.