Concessions to lawbreakers
Experts say government has tried to use the prospect of becoming an OECD signatory as an excuse to get laws passed
Maryam Nawaz. PHOTO: EXPRESS
On the face of it, the proposed package of two laws, one for declaration of foreign assets and the other pertaining to control of foreign exchange appears quite straight-forward. But the proposed provision enabling those owning undeclared foreign assets to pay a 15 per cent tax with no further penalties so that their undeclared assets can be whitened sounds more like a tax amnesty scheme, which in the past have had little positive impact on the national exchequer and have also done little to apprehend those who illegally hide their assets. The other law that amends Section 80 of the Income Tax Ordinance and proposes through Clause 23 to bring foreign trusts under the ambit of law, too, would not have looked so sinister if the Panama Papers leak had not occurred, revealing that the prime minister’s daughter Maryam Nawaz is the trustee of offshore properties owned by her brother.
However, what has made these two laws even more controversial is the foot-dragging resorted to by the PML-N government over the Panama affair and its reluctance to open up about the foreign dealings of the first family. The government insists that these laws need to be passed so that Pakistan can become an OECD signatory, which will enable it to get information about investments of Pakistanis abroad. What is making the matter suspect, however, is Ishaq Dar’s statement that after the opposition’s objections over the laws, he talked to the OECD over the matter and it agreed that it would not seek the passage of these laws if Pakistan’s law ministry could certify that foreign trusts will be covered under the law. People with knowledge of OECD working know that the global body would not waive off a condition just because of political turmoil in Pakistan. Experts say that the government has apparently tried to use the prospect of becoming an OECD signatory as an excuse to get these laws passed. All said and done, the government needs to come up with a way to become a signatory of the OECD that does not involve any concessions to law-breakers.
Published in The Express Tribune, June 13th, 2016.
However, what has made these two laws even more controversial is the foot-dragging resorted to by the PML-N government over the Panama affair and its reluctance to open up about the foreign dealings of the first family. The government insists that these laws need to be passed so that Pakistan can become an OECD signatory, which will enable it to get information about investments of Pakistanis abroad. What is making the matter suspect, however, is Ishaq Dar’s statement that after the opposition’s objections over the laws, he talked to the OECD over the matter and it agreed that it would not seek the passage of these laws if Pakistan’s law ministry could certify that foreign trusts will be covered under the law. People with knowledge of OECD working know that the global body would not waive off a condition just because of political turmoil in Pakistan. Experts say that the government has apparently tried to use the prospect of becoming an OECD signatory as an excuse to get these laws passed. All said and done, the government needs to come up with a way to become a signatory of the OECD that does not involve any concessions to law-breakers.
Published in The Express Tribune, June 13th, 2016.