Imran admits to owning offshore firm to evade UK taxes

Published: May 14, 2016
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PTI chairman says he formed the company on the advice of his accountant. PHOTO: FILE

PTI chairman says he formed the company on the advice of his accountant. PHOTO: FILE

LONDON: Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan on Friday admitted that he formed an offshore company over 30 years ago so that he could dodge British taxes for purchasing a flat in London.

“I had a right to form an offshore company,” Imran told reporters shortly after landing in the British capital.

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“I am not a British citizen, I did not want to pay the full taxes which would have been applicable if I sold my flat,” he said, explaining the reason for creating the offshore company, adding that he was acting on the advice of his accountant to avoid paying more tax than the 35 per cent at which his income was already being taxed.

Reports emerged on Thursday that Imran had created the company, Niazi Services Limited, in 1983 and registered in Jersey, Channel Islands. Imran used the company to purchase a flat in South Kensington in May 1984. Imran was playing cricket in England in those days.

Imran, however, claimed that he had brought all his money, earned or invested abroad, back to Pakistan.

The PTI chief, though insisted that there was nothing illegal in that adding that he never denied owning a flat in London.

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“In a press conference in 2012, when they asked where I got the money for my Bani Gala residence, I showed the sales deed for the London flat from Niazi Services and from that [money] I made a house in Pakistan,” Imran explained. The flat was sold in 2003.

When the Panama Papers, a trove of documents about 200,000 offshore firms of the rich and powerful from around the globe from the Panamanian law firm Mossack Fonseca, first came to light the PTI chief categorically stated that these firms were formed for only two reasons.

“The only reason people open offshore accounts through Panama is to either hide wealth, especially ill-gotten wealth, or to evade tax or both.”

Imran, however, criticised Prime Minister Nawaz Sharif and his family, who were found to own offshore companies in the Mossack Fonseca database, for laundering public money.

“Mian [Nawaz Sharif] sahib and his family are among those who are destroying Pakistan. They can’t declare their source of income, nor did they use banking channels to take their money abroad, nor did they pay tax on that money,” Imran alleged adding that when money is taken out of Pakistan like that it is flight of capital and affects Pakistan’s exchange rate.

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“I am among those Pakistanis who earned their money abroad and brought it back. They [Nawaz] laundered public money and took it abroad.”

Referring to the Chief Justice’s decision not to form a judicial commission to probe the Panama leaks, Imran said this was bound to happen since the court would not accept unilateral terms of references (ToRs) to investigate the matter.

“Unless the government and opposition thrash out ToRs together, the Supreme Court will not accept one-sided ToRs since any subsequent commission will become controversial and will have no standing.”

Imran also said he was excited at the prospect of asking the premier questions about offshore companies on the floor of the assembly.

“I am looking forward to asking questions from the prime minister, and he is bound to answer them,” the PTI chief said.

“What Nawaz is doing, is trying to become an emperor from whom no one can ask any question,” Imran said while responding to the premier’s stance that he would not answer prepared list of questions asked by the opposition.

“ If the opposition does not ask whether public money was laundered and laws were broken, then what is the point of the opposition, then there is no democracy,” Imran said, adding that they will exhaust all legal avenues on the Panama leaks probe before taking to the streets.

Published in The Express Tribune, May 14th, 2016.

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Reader Comments (27)

  • robserver
    May 14, 2016 - 9:28AM

    If he has paid his taxes on his income than his money is completely legal and he is free to purchase any thing he wishes with that money. It is not clear to me why one needs an offshore account if taxes are paid and the money is earned legally. Imran Khan has obviously a lot more to hide. His Family has offshore accounts and many of us wonder how they became so rich in the last 30 years . They have no industry or a business that can prove so much money to go to offshore accounts. Imran is now cot in his own redirect and blame game. In order to point the fingers at others one has to have a clean record to start with. Unfortunately Imran does not live what he preaches. Recommend

  • rehan
    May 14, 2016 - 9:36AM

    The question is now did he declare that money in Pakistan before purchasing the his palace in Bani Gala? The other question is what else he has to hide and how many more offshore companies are owned by his sisters and other relatives as they have considerable wealth without any big business income? Recommend

  • Skeptic
    May 14, 2016 - 9:47AM

    This is what I call transparency and coming forward without any attempt to hide. If you have done nothing illegal, than you should have no reason to conceal the details of your earnings or assets – in Pakistan or elsewhere.Recommend

  • pervaiz
    May 14, 2016 - 10:27AM

    If he have been so pious then why he needed to keep this offshore company secret for more than 34 years, or for 20 years he has been in politics, or for more than 45 days when offshore scandle was here in Pakistan. He declared his offshore company only when JANG and THE NEWS published a story about his company.

    Actualy IK has been changing his statements about offshore companies whenever any new stage came here for this matter. Please compare his all statements as, His original statement when offshore companies unveileded , his statement when names of Aleem Khan & Jahangir Tareen and his statement when when his own company was found by media.Recommend

  • Aftab Ahmed
    May 14, 2016 - 11:16AM

    Imran is clean.
    that’s the reason he has nothing to hide.Recommend

  • Abdullah
    May 14, 2016 - 11:40AM

    Hypocrisy, at best….Recommend

  • Feroz
    May 14, 2016 - 11:52AM

    Anyone who dodges Taxes in country X, will also dodge Taxes in country Y. All are sailing in the same boat without any clothes.Recommend

  • May 14, 2016 - 11:53AM

    where there all are guilty , none is guilty . Recommend

  • Amir
    May 14, 2016 - 11:56AM

    Offshore companies are not illegal. However it is used by people who evade taxes, or have obtain ill gotten wealth and need a place to park it. This needs to be regularized. Recommend

  • May 14, 2016 - 11:58AM

    Whats the PROBLEM !
    IK told the source of his income (legal money), purchased the flats, Sold the flat, brought his money back to Pakistan, declared everything, banking channels were used, so whats the wrong ?
    As he was not the British citizen so he could not be benefited directly or indirectly by British State so he saved his tax through legal means so whats the problem ?
    Recommend

  • OSD
    May 14, 2016 - 12:58PM

    Haha.. I can’t help but laugh at this news. Khan sb should’ve known better before launching a campaign based on the vilification of off shore companies. And for all the PTI people, this point matters. It was all about politics and this sort of a thing kills the mood. This story really is the end of the Panama leaks and unexpectedly, the PMLN has Imran Khan to thank for that.Recommend

  • vinsin
    May 14, 2016 - 1:00PM

    @Enemy of MUNAFIQs:
    He benefited by selling the property. He has not paid taxes on that money neither in UK nor in Pakistan. State job is to take care of minorities not rich people. His property was secured by British State on British Tax payers. Imran invested for many years in UK properties. 50-60% of that money is illegal (Tax evades). You dont have to be a citizen to pay taxes in a country. Recommend

  • irfan
    May 14, 2016 - 1:04PM

    There is no problem in forming off shore companies with your own earned money but it is a crime to establish offshore companies with the money borrowed from the bank like Sharif Brothers.

    Imran Khan is a celebrity and known figure in cricket world and he can easily earn millions by doing commentary.

    Just confirm his worth from Espn.

    Sharif brothers establish offshore companies by using the Tax money of Pakistani people.Recommend

  • RAK
    May 14, 2016 - 1:18PM

    @robserver:
    The tax rates on capital gains (selling an apartment, e.g.) are different on individuals than on companies which can be setup offshore. Similarly tax rates are different on income (rented properties, e.g) also for companies than individuals. There is a perfectly good reason for governments to do so which I can explain also.
    This method is perfectly legal in more than 50% of the world and actually highly recommended for non nationals in those countries. Moreover, mortgage companies/banks are more willing to mortgage properties if owned by Companies due to local regulations and ease of getting the money back if the company goes bankrupt than an individual who enjoys special status while declaring bankruptcy. What Imran, Aleem and Tareen have done is perfectly legal and tick all the moral/ethical boxes. But who can satisfy half-brained noon league supporters and biased media. Recommend

  • Rex Minor
    May 14, 2016 - 1:23PM

    @Enemy of MUNAFIQs:

    As he was not the British citizen so he could not be benefited directly or indirectly by British State so he saved his tax through legal means so whats the problem ?

    His act was neither legal nor legitimate since he was the resient of the UK, his purchase of a flat proves his residence.

    Rex MinorRecommend

  • lkhan
    May 14, 2016 - 2:25PM

    @pervaiz: When in 2012, IK answered questions of the buying and selling of his property in the South Kensington, to justify how he funded his property in Islamabad, he showed the papers where the offshore was visible. However, no one gave it relevance, which indeed it has none, as all was done through legal channels. What is being questioned in NS and his family’s offshore is, basically, where did such massive funds emanate from, which legal channels were utilised to transfer these monies if it is indeed the case; were taxes paid on the monies in Pakistan; and so on. If NS and family bought their properties through legal ways, why on earth do they not show the relevant documents????Recommend

  • Imran
    May 14, 2016 - 4:12PM

    please at least read up on tax avoidance, as compared to tax evasion, before commenting or writing a piece on this topic. Poor choice of words by the writer … It’s avoidance, not evasionRecommend

  • Awais
    May 14, 2016 - 4:45PM

    Very simple guys. There are many of us visiting foreign countries. We also buy different stuff and while coming back, we claim back the tax at the airport because we are already paying the tax back in our country.

    Same he did. There is nothing wrong in it. Also, there is difference in hiding the money trail, source of income etc. Open your eyes and think about the reality. Recommend

  • Imran Qadri
    May 14, 2016 - 4:50PM

    @Enemy of MUNAFIQs

    That’s what is called hypocrisy. If others use same “legal means’ to open and run offshore company then Imran cries foul. Industrialist Sharif family which had been in business since 1930s was exiled from Pakistan by dictator Musharraf after PM had sacked him and he imposed a coup. PM’s son had a legitimate reason to start business outside Pakistan as unconstitutional military ruler whom Imran was supporting for his own selfish reasons was ruling the country and it wasn’t possible for PM’s son to run business here when dictator was settling scores with them and had personal vendetta against them.

    Onus is upon accuser to prove that wrong doing is committed. Previously Imran used to say

    The only reason people open offshore
    accounts through Panama is to either
    hide wealth, especially ill-gotten
    wealth, or to evade tax or both.

    now he has admitted that he,his party’s chief financiers like Jehanghir Tareen and Aleem Khan and even his sister have offshore companies. Isn’t he a hypocrite?Recommend

  • Irfan_Sydney
    May 14, 2016 - 5:25PM

    Imran Khan said that he had an offshore company for the purpose of evading tax in England and PTI supporters find nothing wrong with this statement . Some have written that it was his money earned in England. So with your own money you can look for avenues to evade tax ? Also tax evasion is OK in England but not in Pakistan ? Definition of Tax evasion in a law dictionary is ” Tax evasion is the illegal evasion of taxes by individuals, corporations, and trusts” It is OK to break the LAW in England ?Recommend

  • Salman Ahmed
    May 14, 2016 - 7:55PM

    @Feroz:

    Maybe u don’t understand the difference between tax planning to AVOID taxes..which is what IK did and is legal & the EVASION of taxes.. which is what PMNS did and is illegal.

    The headline is wrong…. He AVOIDED taxes NOT EVADED.Recommend

  • doom
    May 14, 2016 - 9:02PM

    I assume that now there will be a flurry of explanations differentiating between tax evasion and tax avoidance; and learning of the many reasons why totally legitimate wealthy persons may use offshore companies.

    Now when the Khan has to be defended; nobody wanted to bother with these details before. Recommend

  • Amjad Husain
    May 15, 2016 - 12:34AM

    Thieves are also shouting thief, thief.Recommend

  • Parvez
    May 15, 2016 - 12:46AM

    Imran has shot himself in the foot…AGAIN because his moral position stands eroded……but he is not the Prime Minister and te Prime Minister HAS to be held to a higher standard after all he represents the government of Pakistan. Recommend

  • Faisal Afzal
    May 15, 2016 - 2:25AM

    The difference is that everyone knows he didn’t steal anyone’s money meanwhile Nawaz Sharif’s family claims to have earned astronomical wealth in very brief period of time and have nothing to show for where it was earned.Recommend

  • touseef ahmed
    May 15, 2016 - 2:45AM

    its not tax evasion it was tax management that was legal in UKRecommend

  • lkhan
    May 15, 2016 - 8:39AM

    @Faisal Afzal: Faisal, you have hit the nail on the head!!! Truly, IK is the only politician with a clean record. The Sharifs, with billionaire wealth in $$$, yet have not had the empathy to open a hospital or university, both so badly needed in our country, or done anything to lower child mortality, women’ death at childbirth, social workers for the poor, better education for the poor, better diets to improve health conditions of a vast population in the country and more. Yes, foreign visits, daughter and grandchildren dolled up and made up to meet other dignitaries, or sons tag along to do more business – how much ill gotten wealth is enough for such greedy, ignorant, halfwits??? IK’s offshore was totally legal. The Sharifs’ have to prove so are their companies…..Recommend

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