There’s tax evasion of Rs500bn in real estate sector alone: Asif

ISLAMABAD: Defence Minister Khawaja Asif Wednesday said ‘elite capture’ is the root of all socioeconomic ills as tax evasion worth billions of rupees on account of illegal trade done by a handful elite must be stopped to put the country on path to development.

Taking part in a debate on Finance Bill, 2023-24, he said the poor can hardly make both ends meet as 80 percent people in the country could not afford two-time meals, while there is no accountability for the handful elite.

He said that “there are people like Malik Riaz [property tycoon] whose names cannot be mentioned on TV channels”, adding “Unless you take a bitter pill and find a solution to these problems, this country has no future”.

He said that there is tax evasion of Rs500 billion in real estate and the estimated amount of tax evasion in the tea sector is Rs45 billion annually.

In a country where thousands of billions of rupees are stolen non-stop, he added, how will the budget be presented unless we find a permanent solution to tax evasion.

Talking about the budget for the new financial year, he said that the government made utmost efforts to give relief to the people in difficult economic conditions, but the fragile situation condition did not allow this.

“Ishaq Dar [the finance minister] tried his level best to make the impossible possible in the budget. There is not a single institution in the country which has not been affected by rampant corruption and we must fix this menace,” he added.

“We have to spend more on our debt repayment than our total budget revenue. Our two ministries are making a loss of Rs1,000 billion which if privatized, it would save 60 per cent of revenue,” he regretted.

He said that two big foreign tobacco companies are paying taxes while other tobacco companies are involved in the evasion of taxes worth Rs240 billion tax annually.

Without mentioning the names of anyone, he said that representatives of these two tobacco companies are sitting in parliament, adding Rs50 billion and Rs56 billion in taxes were being stolen in the automobile industry and auto lubricant industry, respectively.

Asif said that there was tax theft worth Rs2,880 billion in the retail sector alone, while tax evasion to the tune of Rs30 billion is being done by the steel and Rs222 billion yarn sector.

He said that organisations built for poverty alleviation were paying millions of rupees to their chief executive officers which are the reason they clung to their jobs through stay orders from the courts.

He then read out an IPSOS survey, a France-based market research firm, highlighting which industries evade taxes in Pakistan. He said that the Utility Stores are also not passing on the benefits to the poor due to massive corruption.

“Those who come in the name of poverty eradication are those who make billions of rupees themselves first. There is a class of universities whose vice-chancellors have become billionaires through corruption,” he added.

He accused the judicial system of the country of protecting the tax evaders, saying there are stay orders on tax cases worth Rs1,300 billion.

“We should be allowed to take only a quarter of the salary drawn by a chief justice. The judiciary has sent three prime ministers home [and] even today, clouds are hovering over our heads that the IMF is not ready to approve the loan”, he added.

He accused the judiciary, bureaucracy and a handful elite of destroying the economic system of the country, adding there is a particular class which is drawing 90 per cent pension of the salary.

“At present, there is a circular debt of Rs4,000 billion. Electricity theft is happening in big cities,” he regretted.

Taking part in the budget debate, Javed Hasnain of PML-N emphasized the need to attract investment in the tractor industry to break the monopoly of two companies, adding such investment would reduce tractor prices, which were currently unaffordable for farmers.

Highlighting Pakistan’s annual import of edible oil worth $4-6 billion, he proposed providing incentives to farmers for oilseed production and ensuring timely payments by oil mills.

Javed Latif of PML-N said that the budget has been presented in a difficult economic situation, adding the country can move forward on the path of economic development by upholding the law and the constitution.

He said the May 9 violent acts, never witnessed before, shook the entire country and the perpetrators and planners of these acts should be brought to justice.

Ghous Bux Mahar of GDA said the government should work for the welfare of the people. He said the focus must be given to the uplift of the agriculture sector through the provision of incentives to the farmers including on solarisation of tube-wells. He said work should be accelerated on the CPEC.

Minister for National Food Security Tariq Bashir Cheema said the government is giving consideration to the promotion of agro-based economy.

He said there has been a bumper wheat crop this year. We are also a rice exporting country. He said this is the first budget in which allocations have been made for the solarisation of tube-wells.

Ramesh Kumar said development funds should also be given for the welfare of minorities and renovation and rehabilitation of their worship places.

Agha Hassan Baloch of the BNP called for taking measures to facilitate fishermen of Balochistan. He said more steps are needed to flourish Pakistan-Iran trade. He said farmers of Balochistan should be facilitated by helping them shift their agri tube-wells on solar energy.

Syed Mobeen Ahmed, a PTI dissident, said that “We should go for barter trade and enhance exports by curtailing imports to strengthen the economy”. He said we should not hesitate to take tough decisions through collective wisdom to steer the country out of crises.

Nawabzada Iftikhar of PPP said that the coalition government presented a balanced budget with generous allocations for the agriculture, education, health and other sectors. He demanded of the government to enhance the budget for the BISP to provide relief to maximum people.

Rana Qasim Noon, another PTI dissident, emphasised the need to strengthen the rural economy, adding the budgetary allocations for the agriculture and the information technology sectors were commendable.

Syed Mehmood Shah of JUI-F called upon the government to provide a subsidy on fertilisers to facilitate farmers.

Copyright Business Recorder, 2023