Pakistan’s Rich Own Offshore Assets Worth $19.2 Billion

Pakistanis own $19.2 billion in offshore wealth, with $10 billion of it invested in Dubai’s property.

Compared to 2021, foreign assets of the country’s rich dipped by $1.1 billion in 2022 due to a sharp decline in assets from $5 billion to $4 billion held in Asian tax havens, reported Express Tribune.

According to the Global Tax Evasion report prepared by the European Union (EU) Tax Observatory, Pakistanis own $8 billion in cash, shares, bonds, and investments, as well as an extra $11.2 billion in real estate. This takes the overall foreign wealth of Pakistanis to $19.2 billion, or 3.6 percent of the country’s GDP as of 2022.

Pakistanis owned $8 billion in offshore wealth comprising equities, bonds, mutual fund shares, and bank deposits. Of this, $4 billion is stored in Asian tax havens while the remaining $2 billion, $1 billion, and $910 million are kept in European, Swiss, and American tax havens.

Pakistanis possess $11.2 billion in real estate in Dubai, London, and Singapore. This amount includes a $10 billion investment in Dubai’s property sector, $740 million in London, and $120 million in Singapore. Notably, Pakistanis own $18 million in assets in Paris.

It is worth mentioning that Pakistanis once owned $19 billion worth of assets in Switzerland in 2007, but this figure crashed to $2 billion by 2016. In 2007, barely over $500 million was stashed in Asian havens, a figure that grew to $5 billion by 2021 before plummeting to $4 billion last year.

The report also mentions revenue loss incurred as a result of profit shifting by multinational companies (MNCs). As of 2020, Pakistan had lost $430 million in revenue due to profit shifting by MNCs, with $310 million attributable to siphoning off of profits to non-EU tax havens.

Overall, the report briefly mentioned that East Asia has the most billionaires, with 838 people owning $3.5 trillion in fortune. Their tax contribution was only $8.6 billion. It further noted that 260 billionaires in South and Southeast Asia owned $991 billion in wealth, with $2.5 billion in taxes paid.

In Russia and Central Asia, 133 billionaires own $586 billion and pay $1.5 billion in taxes.

The report said worldwide tax evasion has decreased, but remarked that a significant amount of profits, estimated to exceed $1 trillion in 2022, are still being diverted to tax havens. The report has advised instituting a 25 percent rate on corporations and closing tax loopholes.

It also provides institutional procedures for taxing the wealthy who have lived in a country for a long time but choose to relocate to low-tax locations.