Benami bill: will it work?
A NA panel approved an amended version of a bill that prohibits people from keeping assets in the name of others
Ishaq Dar. PHOTO: REUTERS
A National Assembly panel approved an amended version of a bill that prohibits people from keeping assets in the name of others, also bringing past Benami (unnamed) transactions within the ambit of the proposed law. The National Assembly Standing Committee on Finance gave the go-ahead to the Benami Transactions Prohibition Bill 2016, which will now be presented before parliament. Assets that are usually bought and sold in the name of others are used as a means to hide wealth from authorities, while incurring lesser liability in the form of taxes and scrutiny. The gap in the legal system has enabled citizens to get away with holding assets that would not be possible to own if acquired through their normal income means. Such assets are sometimes used to hide gains that emanate from corruption.
The Bill seeks to put an end to this practice and is likely to affect more people than one can possibly imagine. But how exactly is the government going to enforce it once it becomes law? This is where Pakistan’s problem lies. In several cases, we have seen that laws exist, but weak enforcement and a general inability to see their implementation to the logical end mean that corruption persists. Loopholes are left to be exploited and authorities are unable to go after the big guns. One of the new amendments that were approved features the inclusion of past Benami transactions, which is significant and is likely to open a Pandora’s box of issues. Many politicians, bureaucrats and officials tend to get away with holding assets beyond their means. Is the government serious about going after all of them? How exactly is it looking to go after past transactions that were recognised as legal at the time they took place. The government will get powers to confiscate properties, jail violators for up to seven years and tax at the rate of 25 per cent of the fair market value. With FBR-appointed officials being tasked to act as administrators of confiscated properties, we know there are several issues with the Bill already, given the FBR’s past incompetence.
Published in The Express Tribune, August 18th, 2016.
The Bill seeks to put an end to this practice and is likely to affect more people than one can possibly imagine. But how exactly is the government going to enforce it once it becomes law? This is where Pakistan’s problem lies. In several cases, we have seen that laws exist, but weak enforcement and a general inability to see their implementation to the logical end mean that corruption persists. Loopholes are left to be exploited and authorities are unable to go after the big guns. One of the new amendments that were approved features the inclusion of past Benami transactions, which is significant and is likely to open a Pandora’s box of issues. Many politicians, bureaucrats and officials tend to get away with holding assets beyond their means. Is the government serious about going after all of them? How exactly is it looking to go after past transactions that were recognised as legal at the time they took place. The government will get powers to confiscate properties, jail violators for up to seven years and tax at the rate of 25 per cent of the fair market value. With FBR-appointed officials being tasked to act as administrators of confiscated properties, we know there are several issues with the Bill already, given the FBR’s past incompetence.
Published in The Express Tribune, August 18th, 2016.