Wrong turns in Paradise

It transpires that there is a world of difference in official reactions worldwide between the Panama Papers and the Paradise Papers. The latter have been less explosive in their revelations and are unlikely to destroy individuals and governments. Responses in Pakistan have been slow but the Federal Board of Revenue (FBR) stirred itself on Monday 27^th November and requested information about domestic and overseas bank accounts of former Prime Minister Shaukat Aziz and about 29 others named in the Paradise Papers. The State Bank of Pakistan (SBP) has been asked to collect information on all these individuals who include the owners of commercial banks and corporate conglomerates. In itself nothing untoward — until one looks at the time frame that the FBR is asking for information on.

The FBR requires the SBP to gather information relative to its inquiries from July 2006 and it is more than likely that this is an illegal request. As with the Panama Papers, the Paradise Papers are historic, with data going back decades and very little that relates to current or ongoing investigations of alleged wrongdoing. As per the Income Tax Ordinance of 2001 the tax administration cannot open cases that date more than five years back — meaning that 2012 would be the furthest back they were mandated to look.

It appears that a relatively junior Grade 18 FBR officer is the origin of the requests, which in itself is something of a breach of protocol. Simply, he does not have the authority to command the SBP — unless of course he was acting on the authority of a considerably more senior officer. Despite this the SBP acted on the request and forwarded the FBR request to relevant CEOs and in the process quite possibly spoiling any case the FBR may be pursuing because it is outside the statute limiting the time scale for retrospective examination. The FBR may be fishing in an empty pond anyway, depending on whether there was anything illegal about the offshore assets owned or managed by those about whom it seeks information. We suggest an urgent review of legalities before having to extract another foot from the mouth of governance.

Published in The Express Tribune, November 29^th, 2017.

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