Illegal businesses and lost taxes

On March 6, Pakistan Derby organised at the Lahore Race Club with the usual fanfare. The elite club’s chairman is a former National Security Council head. Estimates for betting ranged from Rs500 million to Rs800 million.

The illegal betting of course remains untaxed. We are reminded of ‘70s when a hotel owner in Faisalabad, then called Lyallpur, had a monopoly over liquor sales. Whenever somebody sought a licence he would use the clerics, on his payroll, to organise processions demanding that no new licences be issued.

Betting was allowed at the Lahore Race Club when it was established in 1924.   Things changed in 1976 when ZAB ordered the club out of the Jail Road site and declared betting illegal. It was established at its present premises in 1981. Lahore Race Club got a boost when Tariq Aziz took over as its chairman. A PIA flight carrying his VIP horses was alleged to have been diverted to on orders from the then Pakistan International Airlines (PIA) chairman, a close buddy.

Betting on cricket and horse races, both illegal, are big businesses in Pakistan. It is estimated that the state can get Rs1 billion a year if they are brought in the tax net.

 

A Lahore-based architect, who enjoys close relations with Gillani family, is getting lucrative contracts allegedly on account of the relationship. It is believed that he gifted a house in DHA’s Phase 1 to the family.

 

Electricity and natural gas line losses in Pakistan are double to triple the level considered acceptable worldwide. Line losses for gas distribution companies like SNGPL should not exceed 4 per cent, but they are reported at up to 11 per cent. A per cent los translates to Rs1.5 billion. Most of the SNGPL shares are now owned by private business groups or individuals. The government holding is under 45 per cent. The business magnates on the Board of Directors include our sole officially-acknowledged dollar billionaire. The chief executive officer has to have support of a majority on the board. He ensures, therefore, that these members get uninterrupted supply of gas and a bonus on their shares. Meanwhile, many industrial units remain shut down.

 

PIA employees and Joint Action Committee members feel betrayed that the promised reforms have not taken place. They say that the former MD has ensured that it is his supporters who run the affairs of the organisation.

 

The PCB Integrity Committee, we are told, was reluctant to clear Kamran Akmal. They had serious reservations vis-a-vis his alleged business deals and contacts with Mazhar Majeed. However, it is said PCB chairman intervened on hi behalf. The gentleman also has some powerful political backers in Islamabad.

Published in The Express Tribune, March 12^th, 2011.