Money whitening: Nawaz unveils amnesty plan for industrialists

Govt links exemption from probe to job creation.

Shahbaz Rana November 28, 2013
“Investment of a minimum Rs10 million in new industrial projects and expansion (of existing businesses) will be immune from any probe and scrutiny,” says PM Nawaz Sharif. PHOTO: PID

ISLAMABAD:


Prime Minister Nawaz Sharif offered industrialists a rare chance to whiten their black money on Thursday, saying his government would not ask their source of income on a minimum of Rs10 million investment.


Pakistan Muslim League-Nawaz (PML-N) had vehemently opposed a similar amnesty scheme when the previous Pakistan Peoples Party (PPP) government offered it.

Living up to its reputation of being a business-friendly government, Nawaz unveiled a comprehensive lucrative package in the PM Office to appease the country’s business tycoons. It includes waiver of penalties, special privileges and protection from taxmen’s access to bank accounts of taxpayers.

“Investment of a minimum Rs10 million in new industrial projects and expansion (of existing businesses) will be immune from any probe and scrutiny,” said the premier, addressing a gathering of the country’s top businessmen.



However, the government has linked the exemption from scrutiny with job creation. The exemption facility will not be available to investment in sectors like arms and ammunition, fertilisers, sugar, cigarettes, cement, among others.

Anything that brings investment in productive sectors of economy should be welcomed and the PPP would not oppose the scheme only because it has been announced by the PML-N, said Naveed Qamar, the PPP’s senior leader. He said when his party tried to introduce the investment amnesty scheme, the PML-N chose to play politics. “The PPP will not play to the gallery and will support the scheme unless it finds something seriously wrong with it”, he said.

It was the third amnesty scheme that the PML-N offered to its traditional voters since the party first came into power. In 1991, the PML-N had offered amnesty on amounts received on encashment of US dollars Bearer Certificates. In 1998, the party had exempted Special US dollars Bearer Certificates from levies.

PM Nawaz said the package was the beginning of investment promotion and growth. He explained that immunity from scrutiny of source of income would not be available to proceeds of crimes, drugs and terrorism.

However, Dr Ikramul Haq, an expert in narco-terrorism and the global heroin economy, disagreed with this explanation. The caveat that exemption from asking questions will not be given on proceeds from laundering, terrorism and narcotics becomes meaningless when the basic principle of the amnesty scheme is that no question will be asked about the source of income, he maintained.

The European Union, IMF and Financial Action Task Force (FATF) will now raise serious questions about the country’s efforts to curb laundering and terrorism financing, said Dr Haq. “Before announcing, the government should have debated the amnesty scheme in parliament.”

The difference between the PPP’s and the new scheme is that this government has offered amnesty only on investments made in the productive sector of the economy, said Federal Board of Revenue chairman Tariq Bajwa, while talking to The Express Tribune.

Tax experts are skeptical about the government’s efforts of broadening of extremely narrow tax base and enhancing revenues, as the ruling party has so far failed to stand up against unending demands of industrialists and traders.


Published in The Express Tribune, November 29th, 2013.

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COMMENTS (31)

Abid P. Khan | 6 years ago | Reply | Recommend

@Ishaq Khan: "The TTP now have a place to invest all their income from ransom payments, drug money and bhatta." . NS is really far sighted. Despite IK's claims at being a Pakhtun, TTP is highly appreciative of NS's overtures.

Ishaq Khan | 6 years ago | Reply | Recommend

The TTP now have a place to invest all their income from ransom payments, drug money and bhatta.

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