Tax breaks and have-nots
Good of the FBR to finally take notice of the hundreds of billions floating around the economy under the ‘gift back arrangement’ head. The Bureau would have noted that such enterprise is the exclusive domain of the rich and very rich and, more often than not, serves the express purpose of avoiding tax. If only the Bureau had taken notice of such tendencies much, much earlier, it is fair to assume that not only would the scheme not be all the rage at present – mostly among the aristocracy, of course — but the FBR would be receiving a lot more tax money and the finance minister would have looked a lot smarter announcing the tax-to-GDP ratio every year at the budget session.
While all of the 2,785 people served notices to determine their sources of income should have ample opportunity to explain their bloated bank accounts, it is very likely that, after scratching a little beneath the surface, the Bureau will discover incidents of wilful money laundering and tax evasion. That is mostly when illegitimate funds are taken away and then repatriated as legitimate gifts, etc. Unfortunately, in broken down, corrupt systems like ours, the gift back arrangement is employed more for text-book money laundering than just plain tax evasion.
This is just another one of the so-called spill overs of the Panama case. FBR has known of such individuals since forever, yet has not taken such a step till now. It will be interesting to see if this investigation reaches its conclusion. A lot of the have-nots will also be watching developments with interest. The lesser privileged are, after all, the biggest chunk of tax payers in Pakistan. And the more they find out what lengths the rich and super rich go to avoid mandatory tax payments and then get away with it, the more some are bound to have smart ideas of their own. This is, therefore, a very important development. At present we clearly have a system where the rich and powerful can break rules and walk free – at least in terms of tax payments – while the not-so-rich are squeezed in accordance with the law. This must finally change.
Money laundering / tax evasion is a crime and that must be dealt with in accordance withe law of the land but is it not also a crime that prime minister is always on foreign tours, rather pleasure trips, under one pretext or the other, along with battalion of courtiers, often by chartered plane with zero output depriving the poor nation with billions of rupees, tax payers hard earn money. then in such situation who would like to pay taxes?
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