GIVEN the flood of declarations, the government has taken a practical step by extending the deadline of the amnesty scheme till July 31.
Going by the emerging numbers, it appears the state is likely to gather far in excess of Rs100bn as tax revenue from the scheme once it ends. The extension does no harm to the scheme or the momentum behind it while adding to the gains for the state.
Now that the deadline has been extended, however, it is important that expectations of a further loosening of the terms or another extension be tempered. There is an ingrained culture of laxity in this country when it comes to tax-related matters, as evidenced by the constant extensions in tax-filing deadlines, and that culture needs to end along with the practice of not filing returns.
Up till now, people can claim to have had a number of valid reasons, such as the Supreme Court’s ruling in favour of the scheme coming less than 20 days before it was due to end, to ask for an extension. But now that hurdle has been crossed, and calls for further delays, using events like the general election or other developments as an excuse, must not be entertained.
What must also be resisted is the demand to allow the repatriation of foreign funds through exchange companies. Banks are the correct channels to use for transacting business, and the entrenched habit of using exchange companies as a surrogate channel for sending business-related remittances must also end.
The State Bank is correct in its stance on this debate, and with a wide extension already in place, the government should speak with a unified voice to all potential declarants that the scheme’s parameters have been decided, all lacunae removed, and further demands for changes are no longer being heard.
The success of the scheme is tempered by what it has revealed. The amount of money hoarded by Pakistanis in foreign jurisdictions is substantial, and this data must be revealed by the government once the scheme ends. The declarants are entitled to their privacy, but releasing data in aggregated form does not violate that.
The government must ensure that data about tax collected, as well as value of assets declared and the number of declarants who availed the scheme is made public.
In addition, we should also be told how many of the foreign assets declared were actually brought back to the country. The massive accumulation of wealth in secret jurisdictions will soon carry grave risks, and the pressure on those who evade their tax obligations is mounting.
Once the scheme ends, the changes in culture that it might have helped bring about must be used to ensure that we never go back to past practices of building vast hoards outside the country.