The major papers in Pakistan reported today that the Federal Board of Revenue (FBR) has unearthed a whopping Rs. 60 billion or $375 million in foreign inflows to 75,000 individuals (read: ‘freelancers’) in Pakistan during the last two years.
If you think that this cash inflow either came via hawala, or maybe 75,000 individuals carried this cash in their pockets while returning to Pakistan from abroad, or even worse, they got this money into Pakistan by smuggling goods, then you are wrong. The fact is that these funds were brought into Pakistan through proper banking channels, and all the details are on the record.
To sensationalize the entire saga, the slumbering FBR is pretending that it was unaware of this foreign inflow and was notified about it only today.
ALSO READ
NBP Challenges FBR’s Tax Recovery Notices of Rs. 36 Billion
It was FBR’s sheer incompetence that allowed the inflows to take place unnoticed, and they must be condemned for getting stories published in mainstream media with a narrative that indicates that this money was laundered in Pakistan and was only just caught by the most experienced and highly professional tax authorities of the county.
To clarify, this precious foreign inflow of $375 million has been brought in by young freelancers who provide their services to the world through Fiverr and other similar online freelancing websites. They get paid through Payoneer — a web-based digital wallet that allows them to transfer their earnings to their Pakistani bank accounts.
What is intriguing is if you divide Rs. 60 billion by 75,000 individuals, each freelancer made around Rs. 80,000 on average during the last two years, which might be far less than what they can make on average, but a certain FBR commissioner (who handles the off-shore inflows) thought of dramatizing this information to villainize the innocent and unsuspecting freelancers. He also intends to send notices to these 75,000 freelancers for tax evasion; such notices are likely to tell them to either pay their income taxes or face account attachment, penalty, or even imprisonment.
Imagine an 18 year receiving a notice of this sort from the FBR. The teenager is only going to panic and may offer the local FBR office a bribe in desperation, and this is probably what this whole charade has been designed to achieve. Otherwise, all this foreign inflow (or at least the majority of it) is tax exempted. Nonetheless, who is going to prove that the revenue had come through IT and IT-enabled services?
On the one hand, Prime Minister Imran Khan is eagerly seeking means to increase Pakistan’s foreign inflows, and on the other hand, the FBR is plotting to bar any foreign inflows because they like catchy headlines.
ALSO READ
Adamjee Insurance to Get its Subsidiary Listed at the PSX
What is being overlooked here is that these 75,000 freelancers have brought millions of dollars into Pakistan each year without any support from any government institute. Ideally, even if there is any taxable income, the freelancers in question should be exempted from it simply because the government has not provided a penny’s worth of support to them. Instead of subsidized electricity, Internet, payment gateway, or recognition as an industry; these young freelancers are not even allowed to open up bank accounts. Banks in Pakistan do not recognize freelancing as a profession and would never open an account because these young freelancers cannot provide “proof of income”.
With almost zero support from anyone, neither the government nor the FBR deserve to demand even a single rupee in taxes from the freelancers.
If this pattern continues, it will be crystal clear that the FBR and the government have decided to destroy the freelancers, and in doing so, they will obliterate the future of thousands of young Pakistanis.
