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Whitening of black money

THE Government, on Tuesday, unveiled its own tax amnesty scheme for whitening black economy by paying four percent on cash assets held within Pakistan and six percent if cash assets are kept abroad. Advisor to Prime Minister on Finance Dr Abdul Hafeez Sheikh, who shared details of the scheme with media along with Special Assistant to PM on Information and Broadcasting Dr Firdous Ashiq Awan, Minister of State for Revenue Hammad Azhar and FBR Chairman Shabbar Zaidi, said that the rate for availing amnesty scheme, would go up by two percent from four to six percent for those who declare their money or assets owned abroad but do not bring them back into Pakistan.
There can be no two opinions that the objective of the scheme is noble – encourage people to participate in legal economy. According to the Advisor, the basic purpose of the scheme is not to generate revenue but to document the economy and to bring dead assets into the economy and make them functional. All Pakistanis have been afforded an opportunity to whiten black money and legalize assets till 30th of June this year and it would become clear by then as to what extent the government succeeds in realizing its objective. Such schemes were also announced in the past as well and the latest one launched by the PML(N) Government helped collect Rs 120 billion. Governmental circles hope to collect revenue in the range of 150 to 300 billion through the fresh scheme but nothing can be said with certainty as the scheme comes immediately after expiry of deadline of the one offered by the previous Government. Repeated resort to such schemes is also an admission on the part of the successive Governments that they were helpless in addressing the challenge of parallel economy in a satisfactory manner. The objective of documentation of the economy cannot be achieved until and unless the Government moves firmly to penalize all those who fail to benefit from the scheme. Every time, when amnesty schemes were launched, it was declared that the authorities would deal strictly with those who do not avail the opportunity to become part of the legal economy but such pronouncement proved to be just hollow slogans. A firm message should go that this is last opportunity to do so.