Pakistan in deep political and financial crisis; Shabbar Zaidi to go soon

KARACHI: Pakistan has not been able to get out of the Financial Action Task Force (FATF) grey list; it is hardly avoiding the blacklisting, while on the internal front, Chairman Federal Board of Revenue (FBR) Syed Shabbar Zaidi is likely to step down from his current office by the end of this month.

Besides economic uncertainty, the political uncertainty is also on top. PTI government led by a former cricketer Imran Khan seems to be absolutely clueless about everything whether it be economy, foreign policy or administration.

Based on Pakistan’s progress report, the Asia-Pacific Joint Group (APG) will submit next month its assessment of PTI government’s progress on strengthening of its systems against money laundering and terror financing.

The FATF plenary will conclude if Pakistan has sufficiently delivered on its 10-point action plan committed at the highest level in June 2018 to fight money laundering and terror financing in order to qualify exit from the grey list or be given some more time to make further progress.

FBR circles are buzzed with the news that it is likely that Syed Shabbar Zaidi will likely resign from the office of Chairman FBR by the end of September 30, 2019. FBR collected Rs170 billion in July 2019, if the average monthly collection of Rs170 billion is assumed for the year, the collection would be Rs1,820 billion. Sources said at most 2,500 billion would be collected in the year against full year target Rs5,500 billion.

FBR has claimed to register new taxpayers and everybody is being served with notices except the giants involved in massive tax evasion and money laundering. IMF has also been pressurizing for concrete action against money laundering and terror financing, and yet cases that have already been detected regarding tax evasion, money laundering and capital of flight are not investigated.

The Financial Monitoring Unit (FMU) of the State Bank of Pakistan (SBP) has reported a large number of cases involving trillions of rupees of money laundering and tax evasion to FBR, but these cases have been shelved. FMU has reported cases against industrialists, traders, businessmen and politicians for further investigation.

On the other hand green channel facility is being misused widely which has adversely impacted Customs revenue collection. Anti-trade policies of PTI government have shifted a large part of legal import to smuggling.

NAB has also withdrawn cases involving billions of rupees of bogus tax returns, misuse of concessionary regime, flying invoices etc. These cases will now be pursued by the FBR and there will be no change as usual.

Car imports were giving much revenue and challenged monopoly of local assemblers, but certain restrictions and excessive taxation has almost eliminated the legal imports. Cars are still coming to the country in almost the same number as before and these non-duty paid vehicles have also been registered with Excise Department illegally.

There are reports that another mini-budget has been finalized and it would be announced next month. Another mini-budget means more taxes on the common man whether direct or indirect, and more curbs on imports thus forcing rest of the legal imports to smuggling.

PTI that was allegedly (very popular opinion) engineered to the power on the back of tall claims i.e. ‘change’ has miserably failed in every aspect. Conspiracy theorists suggest that a very well planned scheme is at play in Pakistan, which aims to destroy the economically so that some super power could occupy Pakistan’s nuclear assets. Some say that appointment of persons on the recommendations of donor agencies on sensitive positions is part of a grand plan.

An official said ranks in government, bureaucracy, business community and establishment were inflicted with black sheep and witnessing the circumstances in the past one year, every wild theory could be true.

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