Pakistan has been facing a daunting challenge of curbing tax evasion, black economy and corruption for the last many decades. The agencies responsible to fight these menaces, namely, Federal Board of Revenue (FBR), Federal Investigation Agency (FIA), National Accountability Bureau (NAB) and provincial anti-corruption departments, have utterly failed to perform their duties. They have never bothered to make arrangements for joint efforts to eradicate these maladies posing serious threat to the country’s internal security in addition to hampering economic growth.

The issues of rent-seeking, tax evasion and black money persist both in Pakistan and India since independence in 1947. On January 27, 2016, Justice AB Chaudhari of the Nagpur Bench of the Bombay High Court in Criminal Application No. 642/2015 has passed severe strictures against the Indian Government "for turning a blind eye to the rampant corruption in the Country." Justice Chaudhari lamented: "It shocks one and all as to the manner in which the taxpayers’ money is being swindled, misappropriated and robbed by such unscrupulous holders of posts." The same is the case in Pakistan but we have yet to see any member of the judiciary passing such a strong stricture.

Justice Chaudhari, in his bold order, has also pointed out that "corruption has become the order of the day over the past few decades and that taxpayers are helpless victims of the sordid state of affairs." While noting that misappropriation and embezzlement is of nearly Rs38,500,000,000 [Pak rupees 59,114,343,317], Justice Chaudhari observed with dismay that the money that was meant for uplifting a scheduled cast [Matang community] went instead in the pocket of a political appointee.

We in Pakistan also have violations of law by public office holders as noted by the honourable Apex Court in its order dated January 20, 2016 in Criminal Appeal No. 264 of 2006 re The State v Anwar Saif Ullah Khan as under:

"The shocking state of affairs detailed above has left us in no doubt whatsoever that the case in hand was not a case of a mere irregularity in appointments but was a case of the respondent willfully bulldozing the regular procedure, forcing his will upon another vested with jurisdiction, approving/making appointments against the interests and requirements of the relevant institution and appeasing his political friends at the cost of overburdening the workforce and the budget of the institution he was meant to serve and protect. We have, thus, been surprised to find that the Lahore High Court, Lahore had concluded that there was no criminal intent on the part of the respondent and that the travesty of fairness and trashing of due process on the part of the respondent was merely an irregularity which did not constitute any criminal offence".

The honourable judges of our Supreme Court in the above case did not go to the extent of what Justice Chaudhari opined to eradicate in what he calls the "hydra headed monster" of corruption by asking citizens of India "to come together to tell their governments that they have had enough and that taxpayers’ may have to resort to refuse to pay taxes by a "non-cooperation movement."

Our honourable judges, however. have also noted with dismay that "doling out jobs in the public sector on the basis of corruption, nepotism, favouritism, lack of due process and misuse of authority has remained a bane of our society for some time and on many previous occasions this Court has been emphasising the importance of transparency, merit and open competition in that respect."

Honest taxpayers in Pakistan are facing double jeopardy. On the one hand their money is being swindled by corrupt public officeholders and government officials and on the other, governments keep on offering tax amnesties and concessions to the tax evaders and looters of public money.

Our judiciary has yet to pass an order of the nature that Justice Chaudhari has when he ordered in categorical terms: "Let the government as well as mandarins in the corridors of power understand the excruciating pain and anguish of the taxpayers, who have been suffering for over two decades in the State of Maharashtra. There is an onerous responsibility on those who govern to prove to the taxpayers that eradication of corruption would not prove for them a "forlorn hope".

Unfortunately, in all reports of mega scandals submitted by NAB before the Supreme Court of Pakistan not a single word has been uttered about revenue losses caused to the national exchequer due to crimes and frauds committed by the powerful elements that hijack the mandate of the masses through money power and corrupt all the state institutions. About such elements, the following remarks have been made by honourable Apex Court in Criminal Appeal No. 264 of 2006 re The State v Anwar Saif Ullah Khan:

"It must be realised and appreciated by all concerned that ministers and legislators exerting pressure upon civil servants for political favours in the public sector and a bureaucracy ready to oblige them form a deadly alliance and their unholy collaboration works as a recipe for destruction of merit, weakening of the state structure and promotion of injustice in the society. It is but obvious that a society which allows merit to be sacrificed at the altar of political patronage, which does nothing to prevent weakening of the state structure and which closes its eyes to injustice is doomed to self-destruct. It is, therefore, about time that the National Accountability Bureau and the courts of the country come down heavily upon such predators….."

Amongst many proofs of rampant corruption in society is an ever-growing size of the parallel economy and tax evasion with the connivance of tax authorities but the present government has given them tax amnesties on two occasions in 2013 and 2016. No serious effort has been made by successive governments, both military and civil, to counter the menace of corruption and bring the enormous untaxed money into the mainstream of economy.

All-pervasive corruption and unprecedented tolerance towards black money has made Pakistan a state where the very survival of public institutions is at stake at the hands of ruthless forces representing money power.

How can we eliminate corruption and tax evasion in Pakistan in the presence of permanent money laundering and tax amnesty scheme in the form of section 111(4) of the Income Tax Ordinance, 2001 that facilitates the whitening of dirty money and tax evaded funds. It ensures that for money brought into Pakistan through normal banking channels no question will be asked by tax officials or FIA. Through this section, criminals and tax evaders get their undeclared money whitened by paying just an extra 1.5 per cent to 2 per cent to any money exchange dealer to get remittances fixed in their names.

It is, thus, clear as noted by Dr Akmal Hussain in Restructuring for economic democracy  that "the institutional structure of Pakistan’s economy is designed to generate rents for the elite at the expense of the middle classes and the poor." It is this structural characteristic of the economy and not just bribery that prevents sustained high economic growth and equity in Pakistan. Unless we change this structure of economy, the morbid story of corruption and tax evasion will continue no matter how many institutions like NAB, FBR, FIT etc we have.