A friendly country and SC to help Pakistan avoid IMF

ISLAMABAD: To avoid going back to the IMF at a time when Washington is getting rough and tough against Islamabad, Pakistani authorities are banking on a friendly country’s help and Supreme Court’s expected decision on amnesty scheme to support the country’s fast declining foreign reserves.

Pakistan is expecting to receive $1-2 billion from a friendly country next week, informed official sources said, adding that authorities’ eyes are also set on the Supreme Court whose decision in a relevant case will have great impact on the success of amnesty scheme, which was recently announced and passed by the National Assembly along the 2018-19 budget.

It is expected that the present amnesty scheme will become successful if the Supreme Court also endorses it at a time when the country badly needs to improve its revenues and build its foreign exchange reserves.

Under the government’s amnesty scheme, announced on April 5 this year, so far almost Rs10 billion has been declared and around Rs500 million is collected as tax. Official sources confirm that there is a lot of keenness to avail the scheme but the vast majority is adopting the policy of wait and see.

“People are unsure as to what the Supreme Court will decide in a relevant case pending before it,” an official source said, adding that most of the people are interested in availing themselves of the scheme while anxiously waiting for the outcome of the Supreme Court’s suo moto case on tracing and bringing back to Pakistan bank accounts and properties held abroad by citizens of Pakistan.

The government amnesty scheme attracts the undeclared money, both within the country and outside. Before the launch of the scheme, Prime Minister Shahid Khaqan Abbasi had also taken Chief Justice Saqib Nisar into confidence on this issue during their recent meeting. The prime minister had also spoken to the army chief before announcing the amnesty scheme coupled by tax reforms.

The government is hoping that the Supreme Court will endorse the scheme while deciding the suo moto notice it has taken to bring back Pakistanis' wealth from abroad. The government’s confidence is based on the fact that the amnesty scheme it had announced is greatly based on the recommendations given by a high-level official committee, which was constituted by the Chief Justice of Pakistan on the issue of tracing and bringing back Pakistanis’ wealth held abroad.

In its report submitted before the Supreme Court in the suo motu case on the subject, the committee had unanimously concluded that the present environment is “most conducive for a voluntary disclosure scheme to Pakistani citizens to declare and repatriate their assets held abroad”.

The committee had also recommended that the existing and prospective measures to trace foreign assets of Pakistani citizens like OECD (Organisation for Economic Cooperation and Development) multilateral conventions should be widely publicised to convince citizens that if foreign assets are not declared through this one-time window opportunity, there is high probability that those assets will be traced exposing such persons to huge penalties and prosecution.

The committee, which submitted this report, was headed by SBP Governor Tariq Bajwa and comprised members including Secretary Finance Arif Ahmed Khan, FBR Chairman Tariq Pasha, FIA DG Bashir Memon, NAB Deputy Chairman M Imtiaz Tajwar, SECP Chairman Zafar Abdullah, Special Secretary Foreign Ministry Shah M Jamal and IB Director Abdul Nasr Shuja.

In the formulation of the report, the committee had consulted different stakeholders including Bashir Ali Muhammad of Gul Ahmed Textiles Mills Ltd, Arif Habib of Arif Habib Group, Dr Ikramul Haq from Huzaima and Ikram, Mehmood Mandviwalla and Ali Zafar from Mandviwalla and Zafar, Syed Shabbar Zaidi from AF Ferguson and Co, Syed Mazhar Ali Nasir from FPCCI, Siraj Kassan Teli and Abdul Basit from Karachi Chamber of Commerce and Industry, Malik Tahir Javaid from Lahore Chamber of Commerce and Industry, Asim Zaulfiqar and Rashid Ibrahim from AF Ferguson & Co, Masoodul Hassan Naqvi and Ashfaq Tola from Tax Reforms Commission.

Meanwhile, in a positive development, China's central bank said on Thursday it has signed a three-year bilateral currency swap agreement with Pakistan worth 20 billion yuan ($3.13 billion). The People's Bank of China (PBOC) said on its website the swap deal would help bilateral trade and investment. The agreement will also lessen burden on Pakistan’s foreign exchange reserves.