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Offshore or onshore!

Dr. Ikramul Haq

In the wake of Panama Papers: Politicians, Criminal & Rogue Industry That Hide Their Cash, heated debatesat homes and abroad are going on and will continue for many days, if not months. In Pakistan people are disillusioned, as usual, that nothing will happen as the beneficiaries of stolen and untaxed wealth are untouchable. It is the time that Federal Board of Revenue (FBR) should be ordered by Supreme Court of Pakistan to make public tax/asset/expenditure declarations of public office holders, judges, high-level civil military officials and the rich for transparency. 

No person should hide behind the laws relating to “confidentiality” and “secrecy.” The FBR, Election Commission of Pakistan (EEC), State Bank of Pakistan (SBP), National Accountability Bureau (NAB), Anti-Narcotics Force (ANF) and Federal Investigation Agency (FIA) should have access to tax record for any inquiry conducted by them under their respective laws. Presently, there exists confusion and misconception in certain circles that Income Tax Ordinance, 2001 guarantees “complete confidentiality” for tax declarations as well as documents filed and that tax officials cannot divulge the same in any circumstances. The correct position of law emerges from the fact that FBR in the past even published tax declarations of all taxpayers with the approval of the federal government. 

Section 216(1) of the Income Tax Ordinance, 2001 says that all particulars contained in any statement made, return furnished, or accounts or documents produced or any evidence given, or affidavit or deposition made, in the course of any proceedings under this law or any record of any assessment proceedings or any proceedings related to recovery of a demand shall be confidential and no public servant save as provided in this Ordinance may disclose any such particulars. There are many exceptions to this rule as contained in sub-sections (3), (4) and (5) of section 216. For example, it is clearly provided in sub-section (5) that nothing contained in sub-section (1) of section 216 shall prevent the Board from publishing, with the prior approval of the Federal Government, any particulars filed by any taxpayer and sub-section (6) in categorical terms states: “Nothing contained in sub-section (1) shall prevent the Federal Government from publishing particulars and the amount of tax paid by a holder of a public office as defined in the National Accountability Bureau Ordinance, 1999 (XVIII of 1999).”

When about 70% of Pakistani legislators—members of Senate and National Assembly—were exposed for not complying with section 116(2) of the Income Tax Ordinance, 2001 by not filing tax returns, wealth statement and personal expenses having taxable income of Rs. 500,000 in tax year 2011, they accused FBR for “illegally” (sic) disclosing data. On the contrary, FBR was proven guilty for not taking any action against these defaulters and not publishing their tax data to ensure transparency in electoral process.

However, it is worth noting that violation of tax laws is not confined to parliamentarians. The ashrafiya (elites)—militro-civil bureaucracy, landed aristocracy, politicians, religious and spiritual leaders (ulema and pirs), loan beneficiaries, unscrupulous business tycoons—flout laws of the land with impunity and take pride in it. Since assets and tax declarations of powerful militro-civil-judicial hierarchy are not available, the citizens cannot know how much state land was given to them on throw-away prices and whether they paid tax on differential of market value as envisaged in section 13(11) of the Income Tax Ordinance, 2001 for this and other similar favours at taxpayers’ expense.  This is the stark reality of today’s Pakistan—legislators make a mockery of laws enacted by them, and the mighty militro-civil-judicial complex takes cover under special laws to avoid public disclosure of asset and tax declarations—availing offshore facility for them isitself a proof of it! 

Article 19A of the Constitution of Pakistan says that “every citizen shall have the right to have access to information in all matters of public importance subject to regulation and reasonable restrictions imposed by law.” Explaining the scope and import of this fundamental right, added in the supreme law of the land through 18th Amendment, the Supreme Court in Watan Party & Others v Federation of Pakistan & Other PLD 2012 Supreme Court 292 [commonly known as Memogate Scandal] held that “Article 19A has thus, enabled every citizen to become independent of power centres which, heretofore, have been in the control of information on matters of public importance….. Article 19A is a grant of the Constitution and, therefore, cannot be altered or abridged by a law enacted by Parliament…It, therefore, will not for this Court to deny to the citizens their guaranteed fundamental right under Article 19A by limiting or trivializing the scope of such right through an elitist construction whereby information remains the preserve of those who exercise state power.” Since our apex court has championed the cause of people’s right to information in PLD 2012 Supreme Court 292, it is a legitimate expectation of the citizens of Pakistan that as a first step, the honourable judges of Supreme Court and High Courts voluntarily make public their assets and tax declarations. The Chief Election Commission and other members should also do it at once to counter the criticism of the parliamentarians that they have been singled out in respect of disclosure of asset and tax declarations. 

The exercise of constitutional right to access to information in all matters of public importance is necessary for transparency, accountability and good governance—essential elements of democratic dispensation. At the heart of Article 19A is ensuring accountability of all. Logically, the right to information must start from those who judge, adjudge and legislate. While legitimate concerns have been expressed about blatant violations of tax laws by the parliamentarians, no effort is made till today to public the tax and asset declarations of the powerful military-civil-judicial trio that has been beneficiaries of state lands and never paid tax on the same as required under section 13(11) of the Income Tax Ordinance, 2001.


The writer is Advocate Supreme Court and Adjunct Faculty at Lahore University of Management Sciences (LUMS). Email: ikram@huzaimaikram.com; Twitter: @drikramulhaq

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