Money-laundering for free, with state sanction
The bonhomie, camaraderie and the relaxed mien marked Prime Minister Nawaz Sharif’s moot with the who’s who of mercantile, trading and industrialist class from across the country. In this reunion of sorts with his ‘core’ constituency, where he personally interacted with many from the podium, the PM was candid, sharing the challenges he and his government faced. The thrust of his interaction though was unveiling his first indigenous economic initiative of the present term to an appreciative audience. The package was an incentives combo, its main components amnesty to black money with nary a question asked, and castrating the taxman. The PM said, it was with a view to bolster investment, which would purportedly result in growth and greater employment opportunities. For the captains of our trade and industry – forever weaned on subsidies, concessions and duty drawbacks – this was music to the ears. And the glow on the faces, the wall-to-wall grins from aisle to aisle said it all. All present were mighty pleased. And why not!
From the dawn of New Year, there would be no scrutiny on fresh investment from Rs10 million to a staggering Rs50 billion – the only proviso being, every Rs5 million ‘drycleaned-for-free’ [most black money eventually becomes kosher, but not without a considerable cost, the finance minister would know this better than most] should equate with one person employed. Other than amnesty on declared black money, there are other incentives, the most salient being: no audit if the return is 25 per cent higher year-on-year, and no snooping around by the taxman into bank accounts of those who take up the cudgel of getting an NTN.
This panacea of laundering on the cheap obscene piles of dough has been periodically tried before, but perhaps never without even a token penalty. Its consequences were none too encouraging. Like ever, Pakistan has remained a rentier economy with its black segment still almost equal to its GDP of $180 billion. The real solution lies not in self-serving, cosmetic measures that favour the artful tax dodgers, but on enabling the FBR and taking measures to document the economy and really enhance the tax base – such as legislation for the Reformed GST that PML-N had blocked when the PPP wanted to adopt it. Nothing would be a greater shot in the arm for our economy than taming terror, bringing on line affordable energy and creating a level playing field that does not queer the pitch for real investors, indigenous and foreign.
