The PTI has hit a jackpot and yet it is behaving like a shy bride. The amount, $248 million, received by Pakistan through Britain’s National Crime Agency (NCA) is huge, though it makes less than 0.15 percent of the promised $200 billion.
We have not seen anyone indulging in attan or bhangra in front of the Ministers’ Enclave. Even the Twitter trends are absent that are often formed when Kaptaan wears a new pair of sunglasses, surpassing himself in beauty and charm.
The PTI wants us to change the subject and keep focused on the Sharifs’ misdeeds. Its latest accusations appear to carry some weight. But here too, Shahzad Akbar, the accountability wizard, wants to confine our thoughts to the Sharifs alone, and neglect the broader picture that emerges from these accusations. We must live and breathe in the PTI’s narrative and in its social media paradise.
It all happened in a week when the PTI government successfully touched the line of the retirement of the chief election commissioner and succeeded in making the Election Commission of Pakistan dysfunctional through its acts of omission and commission. For the time being at least, there is no one to make the party accountable for its foreign funding case.
It was also a week when the Peshawar High Court asked damning questions on the BRT and ordered the FIA to probe the project which has become a masterpiece of inefficiency. It appears that government does not want it’s recently appointed director general to carry out these investigations. Who knows – a dragon slayer may inadvertently kill a tiger as well.
Though the government has failed to bring substantial evidence of corruption against Shahbaz Sharif, dubious business practices have been exposed. I have long argued that the Sharifs’ real crime is not corruption but crony capitalism. They have benefitted from the nexus of state and business and extended benefits to a whole class of businessmen. They are too clever to soil their hands with small change. But crony capitalism is no crime and all the three major parties are run by sugar mills.
In this case too, they apparently benefitted from a facility provided to capitalists through a benevolent state. This is how it worked. There is a section in income tax law (111 of Income Tax Ordinance 2001) that deals with unexplained income of individuals and companies. If an individual fails to explain the source of income, the tax offices are authorised to impose tax along with penalties. The condition was not applicable under Section 111(4)(a) in terms of home remittances; the section was introduced to encourage home remittances into the country.
Home remittances remained exempted from any questioning of sources since year 2004. However, through the Finance Act 2018, a restriction was imposed and remittances equivalent to Rs10 million were granted exemption from questioning. The threshold was further reduced to Rs5 million a year later.
It appears the Sharif family was doing exactly what every second big business was doing – sending money abroad and bringing it back as remittances. And this is precisely what this law was meant for. Though the FBR had pleaded for years that this clause should be amended, they were checkmated by crony capitalists-turned-law-makers.
Though it appears like legal tax avoidance, in fact it is tax evasion which is patently illegal. In order to send money abroad, you have to take out undeclared profits from your business and send them abroad illegally, before bringing them back legally. There are two illegal steps before the one legal step. Since the third step – of bringing remittance – enjoys impunity from asking questions, it protects the beneficiary from probe into the first two questions.
Since such great facility was available, the scale of tax evasion must be mind boggling. Similarly, a good amount of illegal money must have been whitened through this facility without paying any penalty or attracting any scrutiny. No wonder the FATF is breathing down our necks and we are mending our ways only under international pressure.
While every business household might have done it, the Sharifs are no ordinary business family. They have enjoyed power more than anyone else in this country. It is only fair that they face a more rigorous scrutiny and answer legal and moral questions. However, they deserve a fair trial, not preceded by and accompanied with a media trial.
Most importantly, why stop at the Sharifs. Why can’t all businessmen-cum-politicians be probed for misuse – or should I say effective use – of this law over one and a half decade? What was granted as a great tool to make money can also work as a great hammer to break the nexus between power and ill-gotten wealth. Am I making you blush, dear Barrister Shahzad?
The two other cases are also related to movement of money across borders. The PTI is itself snared in a case related to remittances. It is accused that the party received funding from illegal sources, transferred money into the country through hawala-hundi and then stashed this money into an undeclared account.
The $248 million that Pakistan has received also went out of the country somehow, not through banking channels probably. Once wonders if the BRT bus will also take us to a hawala-hundi terminal. Aren’t we lucky to have such smart people running the affairs of our country?
The writer is an anthropologist and development professional.
Email: [email protected]
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