Offshore, onshore

In the wake of ‘Panama Papers: Politicians, Criminal & Rogue Industry That Hide Their Cash’, heated debates at home and abroad are going on and will continue for many days, if not months. In Pakistan, people are disillusioned, as usual, that nothing will happen since the beneficiaries of stolen and untaxed wealth are untouchable. It is time that the Federal Board of Revenue (FBR) was ordered by the Supreme Court of Pakistan to make the tax/asset/expenditure declarations of public office-holders, judges, high-level civil military officials and the rich public, for transparency.

No person should hide behind the laws relating to ‘confidentiality’ and ‘secrecy’. The FBR, ECP, SBP, NAB, ANF and FIA should have access to tax records, for any inquiry conducted by them under their respective laws. At present, there is confusion and misconception in certain circles that the Income Tax Ordinance, 2001 guarantees ‘complete confidentiality’ for tax declarations and documents filed, and that tax officials cannot divulge them in any circumstances. The correct position of the law is evident from the fact that in the past, the FBR even published the tax declarations of all taxpayers, with the approval of the federal government.

Section 216(1) of the Income Tax Ordinance, 2001 says that all particulars of any statement made, return furnished, accounts or documents produced, evidence given or affidavit or deposition made, in the course of any proceedings under this law or any record of any assessment proceedings or any proceedings related to the recovery of a demand, “shall be confidential and no public servant save as provided in this Ordinance may disclose any such particulars”. There are many exceptions to this rule, as contained in sub-sections (3), (4) and (5) of Section 216. For example, it is clearly provided in sub-section (5) that nothing contained in sub-section (1) of Section 216 shall prevent the board from publishing, with the prior approval of the Federal Government, any particulars filed by any taxpayer. Sub-section (6) states in categorical terms: “Nothing contained in sub-section (1) shall prevent the Federal Government from publishing particulars and the amount of tax paid by a holder of a public office as defined in the National Accountability Bureau Ordinance, 1999 (XVIII of 1999).”

When about 70 percent of Pakistani legislators – members of the Senate and National Assembly – were exposed for not complying with section 116(2) of the Income Tax Ordinance, 2001 by not filing tax returns, wealth statements and personal expenses for taxable income of Rs500,000 in the tax year of 2011, they accused the FBR for “illegally” disclosing data. On the contrary, the FBR was proven guilty of not taking any action against these defaulters and not publishing their tax data to ensure transparency in the electoral process.

However, it is worth noting that the violation of tax laws is not confined to parliamentarians. The ashrafiya (elite) – military and civil bureaucracy, landed aristocracy, politicians, religious and spiritual leaders (ulema and pirs), loan beneficiaries and unscrupulous business tycoons – flout the laws of the land with impunity and take pride in that. Since the assets and tax declarations of the members of the powerful military, civil and judicial hierarchy are not available to the public, the citizens cannot know how much state land was given to them at throw-away prices or whether they paid tax on the differential of market value, as envisaged in section 13(11) of the Income Tax Ordinance, 2001, for this and other similar favours at the taxpayers’ expense.

This is the stark reality of today’s Pakistan: legislators make a mockery of the laws enacted by them, and the mighty military-civil-judicial complex takes cover under special laws to avoid the public disclosure of their asset and tax declarations. The fact that they avail offshore facilities is proof of that.

Article 19-A of the constitution says that “Every citizen shall have the right to have access to information in all matters of public importance subject to regulation and reasonable restrictions imposed by law.” Explaining the scope and import of this fundamental right, added to the supreme law of the land through the 18th Amendment, the Supreme Court, in ‘Watan Party & Others v Federation of Pakistan & Other’ PLD 2012 Supreme Court 292 (commonly known as the Memogate Scandal), held that: “Article 19A has thus, enabled every citizen to become independent of power centres which, heretofore, have been in the control of information on matters of public importance… Article 19A is a grant of the constitution and, therefore, cannot be altered or abridged by a law enacted by parliament… It, therefore, will not for this court to deny to the citizens their guaranteed fundamental right under Article 19A by limiting or trivializing the scope of such right through an elitist construction whereby information remains the preserve of those who exercise state power.”

Since our apex court has championed the cause of the people’s right to information in PLD 2012 Supreme Court 292, it is a legitimate expectation of the citizens of Pakistan that as a first step, the honourable judges of Supreme Court and high courts voluntarily make their assets and tax declarations public. The chief election commissioner and other members should also do so at once, to counter the criticism of the parliamentarians that they have been singled out, with respect to the disclosure of asset and tax declarations.

The constitutional right of access to information in all matters of public importance is necessary for transparency, accountability and good governance, which are essential elements of democracy. At the heart of Article 19A is ensuring the accountability of all. Logically, the right to information must start from those who judge, adjudge and legislate.

While legitimate concerns have been expressed about the blatant violations of tax laws by parliamentarians, no effort has yet been made to make the tax and asset declarations of the powerful military-civil-judicial trio public. They have been the beneficiaries of state lands and have never paid tax on them, as required under section 13(11) of the Income Tax Ordinance, 2001.

The writer is an advocate of the Supreme Court and adjunct faculty at LUMS.

Email: ikram@huzaimaikram.com

Twitter: @drikramulhaq