The amnesty scheme launched by the Pakistan Tehrik-e-Insaf (PTI) government hasn’t been able to generate revenues as envisioned during its initiation.

Share Market Live

NSE

The scheme was designed to bring more citizens into the tax net and provide an opportunity to register their undeclared assets through various incentives offered by the government.

It was announced in May with a June 30 deadline for citizens to file their taxes and declare their undisclosed assets. With tax rates of 1.5 percent for domestic properties, 2 percent for undisclosed sales and supplies, it was hoped that a large number of citizens would avail the opportunity. However, figures available with the Federal Board of Revenue (FBR) reveal otherwise.

FBR officials confirmed that around PKR 40 billion was generated from the amnesty scheme till the deadline on June 30, which sources within the government said was significantly less than what had been anticipated. With overall tax collection target for the outgoing fiscal year set for PKR 4,398 billion, the government had managed to collect PKR 4,150 billion, which is a 7.5 percent deficit.

Government sources revealed that after failing to generate the desired revenue an extension in the amnesty scheme was mulled. Prime Minister Imran Khan had already hinted at a potential extension for the scheme in his televised address on June 27.

Pressure by IMF

The FBR managed to extend the tax filing deadline till August 2, but the amnesty scheme could only be extended till July 3. Officials confirmed that the scheme couldn’t be extended further despite the government wanting to expand the window to generate more revenue owing to pressure from the International Monetary Fund (IMF).

Sources within the Finance Ministry confirmed that the IMF had actually frowned upon Islamabad’s tax amnesty scheme, interpreting it as ‘facilitating the corrupt’.

“The amnesty scheme was discussed with the IMF officials in April before it was announced in May. The IMF does not approve of the principle behind the scheme but reluctantly accepted our decision given the dire need for revenue. That is also the reason why the scheme could not have been extended,” revealed a Finance Ministry official.

IMF’s country representative to Pakistan Teresa Daban Sanchez confirmed the same in an interview with English daily Dawn, saying it doesn’t reflect a ‘sense of fairness’ and ‘undermines taxpayers’ morale’.

Against PTI’s stand

Amnesty scheme which was designed to facilitate the corrupt contradicts the ruling PTI’s position on accountability. Imran Khan has long maintained that corruption is the primary reason behind Pakistan’s economic crises, and therefore his facilitation of those who have misappropriated assets is being seen as paradoxical to his rhetoric against corruption.

This is especially true at a time when the government is claiming that it is behind the National Accountability Bureau’s (NAB) crackdown against opposition leaders, which has seen former president Asif Ali Zardari become the latest target of what the PTI leadership claim is a part of ‘accountability drive’.

Three-time prime minister Nawaz Sharif is already serving a seven-year sentence for corruption in Al Azizia Steel Mills. The Pakistan Muslim League-Nawaz (PML-N) President Shehbaz Sharif– Nawaz’s brother – is under investigation as well. On Monday, PML-N’s Punjab President Rana Sanaullah was sent to jail on a 14-day judicial remand for alleged possession of drugs, in a move that the opposition leaders are interpreting as the continuation of ‘political victimisation’ on part of the PTI.

Menace of corruption

Corruption has been a predicament for Pakistan since its inception. The country is ranked 117 out of 180 countries in the Corruption Perception Index (CPI) 2018. Where corrupt practices prevail across sectors, the major share is seen in the government and bureaucracy, with large-scale misappropriation regularly witnessed in government projects.

The state-owned Pakistan International Airlines (PIA) has suffered a cumulative PKR 365 billion loss, which has driven it towards bankruptcy. Similarly, misappropriation worth billions is seen in the Pakistan Steel Mills.

Nawaz Sharif was found guilty of possessing assets beyond means, while Zardari has been arrested for laundering millions of dollars through fake bank accounts. Their parties, PML-N and PPP (Pakistan Peoples’ Party), have ruled Pakistan for the entirety of its democratic tenures from 1988 till 2018, with military dictator Pervez Musharraf ruling the country from 1999 to 2007.

Where corruption is a major factor in Pakistan’s economic struggles, many feel it is used as a pretext by the military leadership to control the civilian leadership in Pakistan. The current PTI regime is believed to have been handpicked after the military leadership came at loggerheads with the PML-N government.

“The PML-N has long been targeted through such tactics, and we are not afraid of anyone. We directly faced Musharraf’s martial law. If you want accountability, maybe an inquiry should be launched into the Peshawar Bus Rapid Transit project , whose cost has gone from PKR 30 billion to PKR 100 billion,” said former interior minister and senior PML-N leader Ahsan Iqbal, referring to his party’s claims of selective accountability.

However, the government maintains that the opposition leaders are actually using the power struggle as a shroud for the fact that they have been looting the masses for decades.

“Zardari and Sharifs have looted the national exchequer. The Federal Investigation Agency has found 31 accounts of Zardari linked to another 5,000 accounts. The money of the masses is being looted and laundered through so many accounts. Similarly, the Sharifs have filled their pockets from the money of innocent Pakistanis. Also, the PML-N and PPP have filed cases against each other as well – it’s not the PTI,” said senior PTI leader Fawad Chaudhry.

KK Shahid is a Lahore-based freelance writer and a member of 101Reporters.com, a pan-India network of grassroots reporters.

First Published:Jul 17, 2019 6:00 AM IST