KARACHI: Expressing his resentment over the lack of civic facilities in Karachi, former chairman of the Federal Board of Revenue (FBR) Shabbar Zaidi has called for making the city the capital of the country for its economic development.
He was speaking during a session on Offshore Assets of Pakistani Citizens, organized by the Pakistan Institute of International Affairs (PIIA) at the institute’s library hall here on Saturday.
Shabbar said Pakistanis hold assets worth $200 billion outside the country.
According to him, $150 billion worth of Pakistani assets are overseas. He emphasized that owning assets abroad is not inherently wrong, noting that $50 billion worth of assets were generated by Pakistanis from abroad, which is legal.
However, he pointed out that $100 billion of these overseas assets should be scrutinized. Zaidi highlighted that the total assets of Pakistanis abroad are equivalent to the country’s total debts. Furthermore, he claimed that the owners of $100 billion worth of these assets cannot provide a money trail.
Zaidi also noted a shift in the pattern of overseas property investments. Until 2000, Pakistanis primarily invested in properties in Canada, the US and the UK. Post-2000, a significant number of properties have been developed in Dubai.
Shabbar revealed that Pakistanis possess significant overseas accounts and have established numerous trusts owned by Pakistani companies.
He pointed out that many individuals who do not wish to reside in Pakistan have substantial overseas assets inherited from their families, which they often do not declare, leading them to criticize the country.
He discussed the issue of commissions on purchasing plant and machinery, emphasizing that both commissions and bribe money taken by politicians are frequently parked abroad. This practice, Zaidi argued, is a key factor in the destruction of industrial development banks in Pakistan, contributing to the country’s economic woes.
He said Nawaz Sharif’s government introduced moneychangers, facilitating untraceable dollar transfers.
Zaidi explained that these moneychangers provided dollars without requiring identification, allowing individuals to deposit these dollars into foreign currency accounts and transfer them abroad. This system operated without scrutiny as no one inquired about the origin of the capital being transferred.
“Since 1992, most money in Dubai has gone out in dollars through the same moneychanger,” Zaidi added.
Former FBR chairman said he granted amnesty in 2018 because they had no choice. “I wanted to bring the assets on record and was substantially successful,” he said. “The Supreme Court couldn’t take any action in its suo motu notice.”
He said the government imposed a wealth tax on these assets and drove people away, saying that as promised, wealth tax should not have been imposed because the government received a good response and substantial foreign assets were declared.
Reflecting on Pakistan’s economic trajectory since its inception, former FBR chairman lamented the country’s misfortunes, attributing its challenges more to internal factors than external influences.
“If Pakistan doesn’t manage its foreign assets well, then Pakistan will have no chance. We must manage these assets to move forward,” he added.
Shabbar commented on Karachi’s development, noting the absence of a mass transit system hindering its progress. He questioned as to why the Sindh government seeks funds from the federal government for mass transit?
Zaidi pointed out that no Prime Minister of Pakistan has stayed overnight in Karachi for nine years. He criticized both the federal and Sindh governments for Karachi’s mismanagement, stating that Pakistan Steel is closed and PIA has been relocated to Islamabad.
Regarding the federal budget, he criticized the lack of strictness in tax collection from retailers. He mentioned that jewelers are paying an annual tax of three lakhs. He highlighted that 40 tons of gold enters Pakistan annually, yet not a single ton is legally imported. “Who brings this new gold and where does it come from?” he questioned.
Zaidi proposed dividing Pakistan’s four provinces into 10 for better governance. He also suggested improving trade relations with India. Additionally, he emphasized that until new provinces are formed, the finance bill should be approved by the Senate.
Copyright Business Recorder, 2024
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