Pakistan planning amnesty scheme to mobilize undocumented money
KARACHI: PTI government is planning an amnesty scheme to bring the undocumented money, present in the country, into the industrial sector rather than boosting revenue collection.It may be mentioned here the last PML-N government had announced a scheme to allow people to declare their hidden domestic and offshore assets amid a drive against tax evasion by the Organisation for Economic Cooperation and Development (OECD). The revenue body was able to collect only Rs120 billion. To recall, IMF had opposed amnesty scheme introduced in Pakistan and said that such schemes failed to achieve their intended objectives. “Experience from Pakistan and other countries with repeated tax amnesties shows that these often fail to achieve their intended objectives while potentially undermining the perception of fairness of the tax system and future efforts to improve tax compliance,” IMF's mission chief for Pakistan Herald Finger had said.
President Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Daru Khan Achakzai referring to the meeting with Prime Minister Imran Khan said proposals had been invited from the business community to make the amnesty scheme productive.
“Government wants rapid industrialization and export-led growth and for this purpose undocumented money present in the country needs to be mobilized into the industrial sector. A scheme is now being planned, which is not aimed at revenue collection and government does not even want this money to go into the real estate sector either,” Achakzai said speaking at a press conference on Tuesday.
Although there are no authentic or official numbers, but it is estimated that country’s undocumented economy is no less than the documented one.
Senior Vice President FPCCI Mirza Ikhtiyar Baig said FPCCI had invited recommendations from its member trade bodies and a comprehensive proposal would be submitted to the government soon.
FPCCI also expressed reservations over the conditions proposed by International Monetary Fund (IMF) for a $12 billion bailout package saying if the conditions were accepted it would be disastrous for country’s industrial and export sectors.
“Government announced to increase electricity tariff by 25 percent over next 4 months increasing from Rs12.98/unit to Rs16.24/unit to bring the power sector losses to zero from July 01 2019,” Baig said adding if implemented it would be ‘suicidal’ for the industry.
He also criticized IMF’s conditions of increasing sales tax, increasing policy rates and further depreciation in the currency.
Chairman United Businessmen Group (UBG) S.M Muneer criticized the hike in gas and electricity prices saying the government did not have a clear strategy to increase industrialization and exports.
“Over Rs400 billion of refund claims are stuck up causing severe liquidity crunch for the export oriented industry. Finance Minister had announced in the mini-budget that discountable promissory notes would be issued to settle Rs80 billion worth of claims, but the noted have not been issued as yet,” he added.
President FPCCI informed that Prime Minister Imran Khan will be visiting China to hold an investment conference in the last week of April. “A large number of businessmen will accompany PM and will hold business-to-business meetings with their Chinese counterparts.”