“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.
COMMENTS (31)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
@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.
The TTP now have a place to invest all their income from ransom payments, drug money and bhatta.
As the comments so far have made clear there is an understanding of where PM Nawaz Sharif stands: pro-inducement of "black", or maybe some licit cash too, inwards to aid development. Never mind the immorality noticed by so many on this site. What Nawaz Sharif's mentality shows is the necessity of intra-party elections in the hope (no more that that at this stage) of a more morally upright to lead the nation. Furthermore this PM does illustrate how he lost the plot in his last go at prime ministership. He does seem to invite take-over.
There is no such classification as Black or White money, its just money. Narco money sucks away form the United States of America to South American countries. Lets make the rules easier so " Floating," money comes into productive process. Surely taxation laws be changed to make productive investment truly friendly. Darconian taxlaws related with Sales Tax, Excise be reviwed tomake compliance easier. High taxation with Sales Tax must be reduced to create earning growth. Concentrate on Earning Growth rather than high multiple taxation and compliances,
"Whitening" of Black Money which is Invested in Pakistani Industry is a "WIN-WIN" Strategy as it will create Jobs for Pakistani people. In case such an amnesty is not offered the Pakistanis with Black Money will keep it outside Pakistan thereby providing the People of the Host Country with Jobs. So "Whitening" of Black Money must be accepted. . Cheers
Corruption is a virtue under PMLN. Nawaz Sharif should go before he totally destroys the last vestiges of morality and ethics in Pakistan.
stupid move.
Industrial NRO
Industrilization at the expense of regulation can never benefit the economy The 2008 economic crisis in the US was due to lack of regulation, where mortages on homes were being traded on the market as a financial instrument, the only people who will support this amenisty scheme are the elite living inside their protected bubbles.There isnt any trickle down effect in this country's economic system either, the pakistani middle class has decreased over the 60 years.
@theOnlySane: Industrilization at the expense of regulation can never benefit the economy The 2008 economic crisis in the US was due to lack of regulation, where mortages on homes were being traded on the market as a financial instrument, the only people who will support this amenisty scheme are the elite living inside their protected bubbles.There isnt any trickle down effect in this country's economic system either, the pakistani middle class has decreased over the 60 years
It is hard to say good work Govt. but you have to start somewhere and the fact here is that there is a lot of money sitting out of the country. Giving these people incentives to invest in Pakistan and take advantage of cheap labor in country, create jobs will be beneficial.
Good job NS, though people with shallow minds will not understand you do have basic economics right.
@Muslim Leaguer exactly my point! We have filthy rich people who are forking their money in Dubai, China and Bangladesh. Why not give them incentive to invest in Pakistan which means create more jobs, circulate more money in local market.
@Muslim Leaguer: Yes, this is a very good scheme; but when a similar one is launched by PPP, then its not? remember Tax amnesty scheme and PML-N's reponse?
Mr Sharif the situation you are in is out of your capacity to handle, you team and you are just another failure in this course of End Game
On the cards of Masters, People are not the priority - and on the cards of people, future is not wise - basically it's a recipe of disaster about to happen, no wonder future is all about choices you make and majority of the country had made wrong choice
Legalizing crime now. How low can you get? What a shame for all white collared people.
The problem with Pakistan is that the Government is poor while some of the people are filty rich. Traditionally because of lack of documentation, possible harassment by the Taxmen and lack of Investment opportunities the money has been pumping into real estate speculation. According to an estimate these Pakistanis have lost more than US$ 80 Billion during the real estate crisis in Dubai (2007-09). Surprisingly, many people are still flocking to invest in Dubai's real estate. Similarly, the prices in various sectors like DHA & Bahria etc the prices are rising exponentially every year. But only the notional values are shown to avoid taxes & stamp duties to the Government. All mega shopping stores in big cities (Centaurus, Pace, Al Fatah, Park Tower, Forum, Dolmen City etc) are all over-crowded and you don't find any place for parking especially on week ends. While a few directionless & radicalized pseudo-intellectual trolls will comment otherwise but this is a very good scheme to induce such Pakistanis to invest in the real economy of their motherland and create income & employment opportunities for millions of Pakistanis.
Utterly disgusting. They have no sense of shame
So this is the scheme. PPP in power make lots of black money, PMLN in power turn said money white. Thanks for the Roshan pakistan N voters.
Now that's why I love Pakistan. Nothing like the smell of stolen money every morning.
Overall this is a very positive policy and this will bring positive results.
Industrialisation has to happen, jobs have to be created. Those who had money were either investing in Plots or stock exchange and speculating
Do you know that last year only 10,280 non-salary Individuals declared Income of Rs 10,00,000 per year in their tax Returns
Do you know that last year about 63,800 salary Individuals declared Income of over Rs 10,00,000 per year in their Tax Returns
Do you realise that as at 5 PM on 28-11-2013 only 1,36,008 Tax Returns had been filed.
Offering amnesty to those who bring back black money is not a bad idea. However, those who bring back the black money must also be required to disclose their source of income and how they took the money out of the country. This would enable the government to take appropriate measures for the future so that these types of crimes are stopped. This would also widen the tax base if the government collects appropriate information and creates a database.
@Hassan: "Demoracy PML(N) style = Government of the rich, by the rich, for the rich " . One cannot let down old chums.
In a war torn, corruption ridden and full of lazy workforce if someone tries to encourage investors to invest you guys call him unpatriotic??? If there are no incentives for business community in Pakistan they will continue to invest in Bangladesh, china and even India. You can be a PTI stooge and criticize PMLN for their policies but you will be the whinger when there are no jobs and investments in Pakistan. I hope ET moderators will publish my comment because these estrogen pumped kids need someone to knock some sense in their heads.
Democracy PML(N) style = Government of the rich, by the rich, for the rich
Good job N voters
This is unbelievable! This man is destroying Pakistan and its resources right under our nose and the only thing we're doing is criticizing the person who actually stood up for Pakistanis being killed in drone attacks and being victimized by the failed justice system in this country.
Look who is talking :)
Simply shameful. Money laundering directly being endorsed by the government. Sher aya sher.
PML-N, legalizing crime since its inception.