Looking for escape: Senator proposes tax amnesty to legalise black money

Talha Mehmood, whose name appears in Panama Papers, proposes just 2% tax

ISLAMABAD: Senator Talha Mehmood, who has been named in the Panamagate scandal, proposed on Friday a tax amnesty scheme for legalising black money at a nominal rate of 2% amid opposition from the government.

In a meeting of the Senate Standing Committee on Finance, JUI Senator Mehmood proposed, “a system may be evolved to whiten and regularise the black money and some incentives may be introduced for the investors to strengthen the economy.” He said the government should allow legalising the black money at 2% tax rate.

After the Panamagate, there is growing pressure on the government to set up an independent judicial body to probe the leaks and determine the source of money that was stashed abroad by those who own offshore companies. However, Mehmood’s proposal was contrary to this drive.

Mehmood, who is also deputy parliamentary leader of the JUI, is among hundreds of politicians, bureaucrats, industrialists and generals who have been named in the Panama papers for having offshore companies.



There is nothing wrong about having offshore companies as long as it is declared in the assets and due taxes are paid.

After the meeting, Mehmood confirmed that he had an offshore company, which existed only for few days and no transaction was conducted.

The family of Prime Minister Nawaz Sharif is also named in the Panama papers. However, mainstream political parties have failed to devise a mechanism to investigate the leaks, as leaders of all these parties are named in the Panama papers.

“The government should once and for all offer a scheme, which I believe will this time be very successful, as people are afraid of recent actions by the Federal Board of Revenue,” said Mehmood.

“The government has no intentions whatsoever to offer another scheme after the failure of the traders amnesty scheme,” Secretary Finance Dr Waqar Masood told the committee.

He said international obligations were one of the reasons behind not offering another amnesty scheme.

FBR Chairman Nisar Mohammad Khan endorsed the finance secretary views.

Masood said against claims of bringing in two million people in the tax net, less than 10,000 traders came in the net.

Early this year, the government offered a tax amnesty scheme to the traders, which badly failed to achieve the desired results. It was the ninth amnesty scheme since 1958.

However, Senator Mehmood kept insisting on giving another scheme and proposed that at least a package should be offered to those who were taxpayers but were not fully paying taxes and hiding their actual incomes.

“There is a category of people who are paying half taxes and saving the other half,” he said.

Mehmood managed to muster support of PML-N Senator Saud Majeed, who backed the proposal of giving a scheme to at least the taxpayers.

“The business community is in extreme pain and the government should offer a scheme to broaden the FBR’s tax base,” said Mehmood.

“I know it’s not good to propose a scheme but I am mover of the proposal of another amnesty scheme,” he said, while offering that the government may set a higher than 2% tax rate.

However, Committee Chairman Senator Saleem Mandviwalla put off a decision on the proposal.

Published in The Express Tribune, June 11^th, 2016.

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