Assets and amnesties

Another controversial amnesty scheme for Pakistan’s rich is believed to be in the offing. On Wednesday, Prime Minister Shahid Khaqan Abbasi announced an amnesty scheme for Pakistanis to declare their foreign assets. The government seems to be following the Indonesian example where billions of dollars were declared after a similar amnesty scheme. The point to note, though, is that such examples are merely a repetition of what has already been decided. The rich will be given a clean chit for a finders’ fee of three to five percent. Why anyone who has foreign assets abroad would choose to declare them is a whole other mystery. The decision to offer an amnesty scheme confirms a simple fact: the government is unable or unwilling to ascertain what Pakistanis own outside the country. The other important thing to note is that the urgency to declare such a scheme suggests that the government needs more dollars to cover the growing external account deficit.

What is notable about the plans for the scheme is the absence of criticism by the opposition. When it came to the issue of former prime minister Nawaz Sharif and his family’s offshore dealings, the opposition were screaming at the top of their voices. The tax amnesty scheme seems to bring no such outrage because many of the same people are impacted. PTI chairman Imran Khan is reported to have been the beneficiary of a similar scheme in the Musharraf period while agitator on demand Tahirul Qadri is a Canadian citizen. This may end up an opportunity wasted. Ordinary citizens are left wondering why they should ever take tax authorities seriously when these authorities seem to be spending half their time coming up with escape clauses for those who have not followed Pakistan tax laws. There is a need for such schemes to be reconsidered and there to be an end to the use of stop-gap measures to plug holes in the economy. The focus of the government should be on implementing serious macroeconomic reform. Three amnesty schemes have already been announced in the last four years. All three have failed miserably. That raises a number of very serious questions. Who keeps offering these amnesties as fiscal strategy? Who gains from these schemes? Why do NAB and the FIA not take a public stance on these? Why does the opposition stay silent? Tax amnesty schemes are a failed fiscal policy in a country crying for serious tax reform.