PRIME Minister Nawaz Sharif, Finance Minister Ishaq Dar, Interior Minister Chaudhary Nisar Ali Khan, Punjab Chief Minister Shahbaz Sharif, Chief of Army Staff (COAS) General Raheel Sharif and the Director General of Inter-Services Intelligence (ISI), Lt. Gen. Rizwan Akhtar are all honourable Pakistanis. Their patriotism is beyond an iota of doubt. And their Pakistaniat is unquestionable. It is granted that their collective decision on any national matter would not be dictated by any parochial interest. And it is a given that they would always keep the national interest closest to their hearts and minds. However, their collective decisions on any national matter unless tempered by the approval of the federal cabinet in which sit representatives from all the four provinces belonging to the ruling party and its coalition partners and endorsed by Parliament which represents the collective wisdom of the entire nation would perhaps make some Pakistanis living in the three smaller provinces to wonder, not too unjustifiably, whether or not the respective interests of their provinces were kept in mind while taking these decisions by these five honourable, patriotic, fully committed Pakistanis harbouring, undoubtedly, no parochial interests; all belonging, however, to the country’s largest province, Punjab.
Had it been a matter concerning Punjab alone, that was discussed by these ‘big five’ at the PM House on Tuesday no one would have had any reason to question the presence of the Punjab Chief Minister at the meeting. But the matters discussed at the meeting were essentially national if one went by the official hand out issued after the meeting according to which these had pertained to national and international security, improved situation in the country and as well as in Afghanistan, expression of satisfaction with particular reference to the recovery of Ali Haider Gilani, the progress of operation Zarb-e-Azb and return of Internally Displaced Persons (IDPs). One wondered why the ruling party or its coalition partners representing KPK and its Governor were not present at a meeting which was discussing progress of ZeA which currently is in the process of clearing the terror hide-outs in the FATA region and the subject of return of IDPs. In fact one felt even the Chief Minister of the KPK should have been invited to participate in this high powered security meeting. And since the meeting had discussed the overall security situation in the country as well as in Afghanistan one felt the ruling Party’s foreign policy advisors and the chief ministers of Sindh and Balochistan also should have been invited to the meeting. But even if one were to accord due respectability to the un-sourced, unsusbtaniated and officially denied reports that the media circulated and broadcast after the meeting one would have expected a nationally representative gathering at the Tuesday meeting for developing a national consensus on matters of national interest such as the Panama leaks. Here is the non-sourced, unsubstantiated, officially denied story which appears to have been circulated by those who perhaps want the natural turf-tussle between the newly saddled civilian administration and the military which has been making all major national decisions at the GHQ for the last 65 years without any reference to the Constitutional requirements, to deteriorate into a full-scale confrontation leading to a 4th of July 1977 situation: “he meeting was aimed at reviving civil-military relations following the Panama revelations. Army chief called for ‘across-the-board accountability’ in veiled reference to the Panama leaks. “The meeting was facilitated by Punjab Chief Minister Shahbaz Sharif and federal interior minister Chaudhary Nisar as well as some Corps Commanders and retired military officers. “The army chief also assured that armed forces of the country will fully support every meaningful effort in that direction to ensure a better future for our next generations.” So, it was mainly a national matter that was discussed at the high level meeting on Tuesday attended by five big ones but all belonging to the province of Punjab. Such meetings at such levels should be avoided at all costs in the supreme national interest. And any impression that the leadership of armed forces was seeking extra-constitutional role in the running of the civil administration also needs to be shunned religiously lest wrong signal is conveyed to the terrorists bidding their time to derail the nation from its democratic path using violence. Before indulging in Panama politics all those with vested interest must go through the laws of the land that govern the national economy. Here is the latest position of the Federal Board of Revenue (FBR) on the leaks: The FBR member Inland Revenue Policy, Rehmatullah Khan Wazir has said that the FBR is not legally empowered to open up cases of filers and non-filers beyond six-year and five-year periods, respectively, for probing the owners of offshore companies.
The relevant amendment in the law was made through the Finance Bill 2010 for curtailing this period from 10 years to 5 years.
Most of the offshore companies belonging to Pakistanis were formed prior to these years. Also, global income of resident Pakistanis is taxable but not that of non-resident Pakistanis. The taxability has been done on the basis of residency and not nationality.
There are two types of offshore companies. The first category is a company where investor has made investment abroad after payment of taxes. It is a legal company. There is no law in Pakistan which prohibits Pakistanis from investing in offshore companies. The second category is that the tax has not been paid or amount has not been declared in Pakistan. There are three major income tax provisions to deal with such undeclared investment including section 111 and section 114 of income tax ordinance 2001.
The law empowers FBR to open up cases of last six years in case of filers and five years in case of non-filers to ascertain whether resident Pakistanis declared offshore companies in their wealth statements or not. But in both cases only those companies which were established in 2011-2015 could be scrutinized.
Moreover, the FBR does not have tax treaty with Panama so the Board is unable to seek information from the offshore entity about the investment made in the entity by Pakistani residents.
Therefore, it would be very much in the interest of every Pakistani including all state organs like the Defence forces, the NAB, the FBR etc as well as opposition political parties to express their opinion on the matter and/or make calls for taking appropriate actions only in accordance with the law of the land that governs the national economy. One can make a political football out of Panama leaks but to believe that these leaks would help the law to catch the corrupt would be too naive an idea, to say the least. .