Politicians Against SC Committee’s Recommendations on Curbing Flow of Black Money

The tax amnesty scheme seems to have the backing of politicians. The government is planning to introduce another amnesty scheme for foreign account holders to increase tax revenues. The government told that if the account holders pay their due taxes, they won’t face any legal cases on the issue.

Regarding this matter, Supreme Court formed a committee which made some recommendations that were not welcomed by political figures.

Supreme Court’s Recommendations

The three-member committee headed by Governor State Bank Tariq Bajwa suggested that restrictions be placed on the free inflow of money to the country and the secrecy regarding the foreign account holders be withdrawn.


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The purpose of this committee was to find a way to ”trace and bring back to Pakistan bank accounts and properties held abroad.”

Political leadership didn’t seem to agree to any such points as they flexed towards the amnesty scheme.

The committee proposed to tax remittances,  over a certain threshold value, sent to Pakistan. The prime minister, however, was not in favor of taxing the remittances and withdrawal of secrecy as well.

Committee’s Recommendations

The committee noted that there are certain loopholes in the laws that make it easier to clean and transfer illegally earned money. Some of the recommendations made by the committee are;

  • Foreign currency bought through open market shouldn’t be allowed to be deposited in foreign currency accounts in Pakistan.
  • Amendments are needed in the Income Tax Ordinance that make it easier to legalize black money. A clause of this law is used to legalize money by calling it a foreign remittance.
  • A threshold should be set that doesn’t allow high amounts of money to be sent to the country without any investigation. The current limit is around Rs 10 million per person annually. The committee noted that only 2% remittances cross this value so it should be brought down.
  • Amending sections 4 and 5 of the Protection of Economic Reforms Act 1992 and Section 3 of the Foreign Currency Accounts Protection Ordinance to restrict the free flow of money to foreign accounts.

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Chief Justice of Pakistan further inquired whether the Supreme Court could impose a ban on foreign currency accounts or not. On this, a member of the bench told that an amendment to the law is needed to ban foreign accounts.

Amendments

There were proposals to bring amendments to the laws in the next Finance bill of 2018-19 and the amnesty scheme as well. These laws are;

  • National Accountability Ordinance 1999,
  • the Foreign Exchange Regulations Act 1947,
  • the Income Tax Ordinance 2001,
  • the Prohibition of Benami Transactions Act 2017,
  • the Federal Investigation Agency Act 1974 and
  • Companies Act 2017.

However, it doesn’t seem possible, as all the laws can’t be amended under the Finance Bill as it doesn’t have enough jurisdiction.

The committee told that the report is just a recommendation and;

The report is the considered view of the committee and it is meant for the Supreme Court. It is up to the Supreme Court and the federal government whether they accept the committee’s recommendations or not.

Via Tribune



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