Prophet Muhammad (SAWW/PBUH) said: “Seek knowledge from the Cradle to the Grave”
After tremendous response and with thousands of professional accountants (#ACCA members) having registered and attended the four (4) CPD sessions of the ongoing #2020 CPD series, we’ve been receiving many queries about the recordings of the CPD sessions particularly by those who couldn’t attend.
Although you won’t be able to interact or have a Q&A session but still you’d be able to benefit from the recordings.
Please find below the details and links in this regard:
افراد، تنخواہ دار افراد اور ایسوسی ایشن آف پرسنز کے سال 2019 کے ٹیکس گوشوارے جاری کر دیئے گئے ہیں #FBR
File your #IncomeTaxReturn2019 & become a #filer.
Contact us at #MLCC for a seamless, professional & exceptional experience where experienced & top professionals including FCCAs, CFAs, FCMAs, CPFAs, CAs & Advocates will ensure that you all your matters are taken care of with highest standards of excellence.
Muhammad Iqbal is known to us as a marvel of excellence in all the fields he
worked in. He is the visionary who dreamed of Pakistan, the famous Poet of the
East, a top philosopher, a revered scholar, a politician, a parliamentarian par
excellence and even a spiritual guide for many. Thanks to the recent pioneering
work published in the book of my honorable father Mr. Zaheer Ahmad Meer
Advocate, titled “The Great Lawyer – 106 Reported Cases of Allama Muhammad
Iqbal”, we’re now aware that he was a Great Lawyer too.
what most of us may be unaware of, is the fact that he was also a fine
proponent of economics. He wrote his first book on Economics titled “Ilm ul Iqtisadiyat”
or “Science of the Economics” in 1903 in Urdu, at the age of just about 26
years old, when no one was doing such work even in English in the sub-continent.
Unfortunately, this first ever book on economics
in Urdu language, largely remained unnoticed, not to be realized, never to be
Let us remember that during Iqbal’s era, the classics of Adam Smith, John Stuart Mill, Ricardo and Alfred Marshall were taught all over Europe. But in the Indo-Pak subcontinent even teachers and scholars had only a hazy idea of this subject. Actually, it was not even introduced at the University level anywhere in the Indo-Pak subcontinent baring three universities.
” Unfortunately, this first ever book on economics in Urdu language, largely remained unnoticed, not to be realised, never to be properly acknowledged “
It is therefore spellbinding that Iqbal had such
deep insights into the subject of economics and the economic plight of the
Muslims of the sub-continent. He was deeply concerned with the unequal income
distribution that turned the rich richer and the poor poorer, a challenge we
still face across the globe and in our homeland, Pakistan. The mere writing of
‘Ilm ul Iqtisadiyat’ renders him economist in the same-way as the Wealth of
Nations (1776) made Adam Smith an economist, or the Das Captia portrayed Karl
Marx as one; albeit the context eventually differed.
Iqbal also pointed out on 28 May I937 that: “The
problem of bread is becoming more and more acute. The Indian (Muslim) has begun
to feel that he has been going down and down during the last 200 years.
Ordinarily he believes that his poverty is due to (Hindu) money-lending or
capitalism. The perception that it is equally due to foreign rule has not yet
fully come to him. But it is bound to come.”
Iqbal, the learned enigma and a great thinker of Islam, was actually the first
economist of the Indo-Pak subcontinent to raise his voice against the
exploitation of Muslims by domestic and foreign classes controlling the means
Dr. Muhammad Iqbal was anti-Imperialism in his thought process, yet he was able
to point out the key problems as well as draw up workable solutions to address
1. Welfare based wealth
presented the concept of welfare based wealth, distinguishing it from the
traditional wealth. An example to
elaborate the concept would be that if skilled labor were enslaved for forced
labor, it’ll increase the national wealth but will be detrimental to the
welfare based wealth of the citizens and wider humanity. Similarly a pledged
property may be accounted for as the wealth of the creditor in the event of a
default but won’t meaningfully impact the overall wealth of the state.
2. Population Control
Allama Iqbal also pointed out the excessive increase in population as a core
issue at times of saturating economic resources, in an era when no one in the
Islamic world did that. He very logically explained that while increase in
population can be productive in a scenario of untapped or plentiful economic
resources, it becomes counter-productive economically when the situation
reverses, unless, other economic avenues can be explored to further create
economic opportunities for growing population.
can all appreciate, how this issue identified in 1903, has become a core
economic concern for us in 2019, albeit 116 years later. I ask you all, what
else do you call vision & foresight, if not this?
3. Economic Equilibrium in
Iqbal also advocated that a research-based
analysis can determine the equilibrium in various sectors of the economy and
modes of factor pricing as per the local context. Yet, at the same time he also
urges to focus upon human development through exploration and preservation of
natural resources and improving human and societal relations. By doing so,
Iqbal practically envisioned today’s HDI (human development index).
Iqbal has also put forth various strategies used
by recent economic success stories. For example, he discussed regional
specialization in producing goods and services and brought in the notion of
comparative cost, concepts that China practiced in its economic resurgence. This
basically advocates for a country or its federating units, e.t.c. to focus its
expertise in their specialzied area of production/services while accounting for
the opportunity cost of producing that good or service in order to achieve
The writer is
a leading economist and experienced tax expert who holds five top professional
finance, investment and accountancy qualifications CFA
(USA), CPFA (UK), FCCA (UK), CA (ICAEW, UK) & Anti-Money
Laundering Specialization along-with substantial international exposure and
represents Pakistan on Global Tax Forum while sitting on the boards of several
think-tanks. His profile can be accessed at: https://omerzaheermeer.wordpress.com/about
With the deadline for declaring undisclosed assets, sales and expenditures under the Asset Declaration Ordinance, 2019 (commonly referred to as Tax Amnesty scheme) being over, it’s time to analyze the results, experiences during the process and the follow-up required.
Asset Declaration Ordinance,
2019 was promulgated on 14th May 2019. The stated aim of the
initiative was to bring new people, previously unregistered, within the tax-net
voluntarily. The initial response just like the 2018 Tax Amnesty scheme was
lukewarm, perhaps owing to both the lack of clarity and the Ramadan and Eid
Initiatives that showed
Thankfully, following our
advice, the concerned quarters ran public information campaigns and announced
that they had successfully integrated databases
of various authorities in the country and now also possessed the information
gained via OECD multilateral convention about Pakistani residents’ offshore
accounts and are further strengthening the mechanism to launch a compliance
drive immediately following the amnesty. An adjudication authority for
enforcement of The Benami Transactions (Prohibition) Act, 2017.
This, after a lapse of almost two years since the law
came into being, signaled the seriousness of the government for enforcement
The scheme, however, really took off in the last ten days of June 2019 with the seriousness of the Government in enforcement becoming even more clearer and the arrests of top political figures by NAB and stringent sentence in corruption case of ex bureaucrat by the Supreme Court of Pakistan sending strong messages.
“The promised enforcement action coupled with structural reforms to eliminate taxpayers’ harassment and to rationalize the tax system should be undertaken. Without these measures, this scheme would be remembered as just another one in the history of the amnesties launched in Pakistan. However, with the right approach and actions this can become the turning point for the taxation compliance culture in Pakistan”
Moves that backfired
NADRA and FBR then tried to
further shore up these efforts by launching their databases. NADRA launched its
database first with initially a fee of Rs. 500 to access the records of a
person held by NADRA. Unfortunately, it was a disaster due to the lack of data
and the people were taken aback that if this was the data held by the
authorities then nothing much has changed. The move backfired big time. Many
people started talking of taking a “risk” believing that the claims are a
Next came the FBR database,
free to access. The quality of data was better than NADRA’s database but was still
very weak. However, FBR atleast did the sensible thing of posting a message
that it was not a complete profile and that the details were still being
populated from the database. A rumor was also spread claiming that whoever
logged in to the databases would be recorded and followed up by the FBR. This
negativity infact saved the day with people starting to avoid checking their
profiles and simply preferring to avail the scheme to streamline their affairs.
Experiences and Challenges
Despite these setbacks, most
of the people, including those belonging to the powerful segments as retired
military officials, bureaucrats, judges, journalists, e.t.c. were flocking to
avail the scheme. Just a clarification that the bar on Government employees’
being excluded from the scheme was for those currently serving or retired
within the last 10 years.
With the results showing
healthy signs and uniform demands of an extension from all professionals, tax
practitioners, legal fraternity, chartered and chartered certified accountants,
businessmen, e.t.c., the Government did the best it could in the face of the
IMF pre-conditionality of no Amnesty scheme during their program, which was an
extension of 3 days, till 3rd July 2019. The response erupted!
People were literally
running from pillar to post to avail the scheme in the last few days which led
to regular breakdown of the online system of FBR (IRIS). With extreme load on
the last day, the system constantly got choked. Furthermore, a confusion led to
the rumors of the systems being partially shutdown at 5 PM on 3rd
July 2019 instead of the usual tacit understanding of the English calendar’s
end of day at 11:59 PM, in line with the past practices of the FBR. This led to
atleast 6,000 applications of the already paid tax being stuck in the system
with tens of thousands not being able to submit. Mr. Shabbar Zaidi, the FBR
Chairman, allowed the processing of the former while the fate of the latter
remained unclear to this moment.
Despite all the challenges, the scheme became the most successful in terms of the numbers availing the scheme and the new tax registrations being issues. At the time of publication, 137,000 people had availed the scheme compared to 84,000 over a much larger duration in the 2018 amnesty scheme. Out of the 137,000, almost 100,000 were new tax registrations. With the stuck cases being cleared, the number is expected to grow from 137,000 to closer to 150,000. Almost $ 20 billion worth of previously undisclosed assets were declared. However, the tax collection was less compared to the 2018 scheme owing to the low rates of this scheme (1.5% – 4% for most asset classes) compared to the last one’s 5%.
The challenges faced during this scheme should be
studied, and lessons learned for the future particularly about the capacity
building of the state institutions both in terms of the human resource and the
technology. The promised enforcement action coupled with structural reforms to
eliminate taxpayers’ harassment and rationalize the tax system should be
undertaken. Without these measures, this scheme would be remembered as just
another one in the history of the amnesties launched in Pakistan. However, with
the right approach and actions this can become the turning point for the
taxation compliance culture in Pakistan.
writer is a leading economist and tax expert who holds five top professional finance,
investment and accountancy qualifications CFA (USA), CPFA (UK), FCCA (UK), CA (ICAEW,
UK) & Anti-Money Laundering
Specialization along-with substantial experience and represents Pakistan on
Global Tax Forum while sitting on the boards of several think-tanks. His
profile can be accessed at: https://omerzaheermeer.wordpress.com/about
a pre-recorded message released on social media and elsewhere, the Prime
Minister Imran Khan, while addressing the nation said that only 1% out of the
220 million Pakistanis bear the burden of taxes. He painfully shared that the
nation is suffering, as many are not fulfilling their lawful duties and paying
their due share to the State. PM Imran Khan also shared that the institutions
now have information and are constantly getting more, implying that they have
also developed the mechanism to identify and followup the tax evaders. The PM concluded by saying that this is the
last chance to avail the recently launched tax amnesty till 30th
June 2019 and sleep peacefully while also contributing to your nation. The
spirit of the message is right.
times are surely changing for the taxation landscape in Pakistan with
transnational cooperation from organizations such as OECD (Organisation for Economic Co-operation and Development), newer laws being enacted such as the Benami Act and the technology
shaping the data-driven focus of the tax machinery.
used to happen in the past was that either people used to connive with some
corrupt officials or simply stay out of the tax net willfully to avoid full
disclosure of their actual wealth, sales, expenses, e.t.c., while accumulating
assets in their own, their family or trusted or controllable third party’s
names. While this was very common, some people would simply behave in a similar
manner due to ignorance of the laws and the resulting implications. This used
to result in both the tax evasion as well as mis-declarations with often the
use of benami transactions. The FBR, unfortunately, neither had the capacity
nor the information to detect and/or take any penal action. Hence there was not
much to worry for such people and they believed it was easier and perhaps “better”
to continue with such practices. These notions stand to fail now.
this. You bought a good expensive property for your son or daughter in a posh
area, perhaps Bahria Town Karachi or DHA Lahore. One day, you get the news that
this same property led to the arrest of your beloved kid and the confiscation
of the property. How would you feel?
alternatively imagine your father being arrested in front of you for not being
able to justify the money trail of your hard earned empire. Or that loyal
servant of yours being taken away for holding a benami for you while the
property is getting confiscated, atleast partially. Nightmares? Yes. But the
good news is that you can save yourself from all these and other troubling
possibilities at a fraction of the cost that you may have to incur otherwise in
So it is only logical to avail the “Tax Amnesty” to both serve your interests as well as those of the country and be able to sleep peacefully as the PM told us.
Information, Capacity & Technology :
is already receiving information courtesy of the OECD collaborations about the
foreign properties, bank accounts and other assets of the Pakistani residents.
Multiple FBR Chairmen in the past, have also claimed to have database of three
to four million people without an NTN (national tax number) but enjoying a
lavish life style with multiple foreign trips and/or assets in their name. As
if this wasn’t sufficient, FBR has over time acquired the data as a result of
the withholding tax regime. Last but not the least, the coordination between
FBR, NADRA, FIA, e.t.c. is bound to make life difficult for the willful tax
evaders as well as the ignorant culprits once the relevant drive is started.
Will & Penalty Provisions:
FBR has already shared his intention to launch a drive to catch tax evaders and
mis-declarants post amnesty deadline of 30th June 2019. State
Minister for Revenue, Mr. Hammad Azhar had shared about the integration of
various databases which will certainly be used for such a drive. This is also
supported by the fact that due to the filer/non-filer differential taxation
regime and the withholding regime a lot of the data regarding immovable
properties and other assets is already received by the FBR. It’s not like the
past when the Federal Board of Revenue struggled for the data.
To make matters more “interesting” for tax evaders, the FBR issued the Benami
Transactions (Prohibition) Rules 2019 on 11th March 2019. With
this, the Benami Transactions (Prohibition) Act 2017, came into force.
of holding benami property — moveable or immoveable — plays a significant role
in enabling tax evasion, money laundering and terror financing.
entails strict punishments for persons entering into benami transactions. Any
person found guilty of the offence will be punishable with rigorous imprisonment of at least one year, which may extend to
seven years, and a fine of up to 25 per
cent of the fair market value of the property. The Income Tax Ordinance 2001, already contains severe punishments for
mis-declarations and/or tax fraud which can range from heavy penalties to prosecution.
A common misconception is that paying taxes and then
buying a benami assets would be fine. Not paying taxes is one offence and
holding a benami asset is another offence.
wrong notion held by many is that if you’re not
earning taxable income or if your tax is already been deducted you do not need
to hold an NTN or file your tax returns. They’re both wrong.
have to get an NTN and file your return even if you don’t have a taxable income
but own immovable property with a land area of two hundred and fifty square
yards or more or owns any flat located in areas falling within the municipal
limits existing immediately before the commencement of Local Government laws in
the provinces; or areas in a Cantonment; or the Islamabad Capital Territory or
even own a motor vehicle having engine capacity above 1000 CC or even have
a commercial or industrial connection of
electricity where the amount of annual bill exceeds rupees 500,000.
are thousands of property owners in each of the major housing societies such as
DHA, Bahria Town and many other private ones in the major urban centers. How
many of them have declared their affairs and even those who have, how many of
them have the proper paper trail? All of them would be liable to punitive
action under the above laws.
Keeping in view of the above facts, the pressures on the national exchequer, the international and local collaborations and technological tools to use data analytics and the will of the Government to enforce the law, all these indicate that it is in the best interests of those who either because of being unaware of the law or even willfully, were in breach of the laws, should take this “golden” opportunity to avail the “Tax Amnesty” offered by the Asset Declaration Ordinance, 2019 whereby they can “whiten” their wealth, undeclared sales, expenses and/or the benami assets for as little as 1.5% only. Compare this to the potential tax and penalty costs which can be as much as 25% – 50% of the property value alongwith upto seven (7) years of rigorous imprisonment. So it is only logical to avail the “Tax Amnesty” to both serve your interests as well as those of the country and be able to sleep peacefully as the PM told us.
The writer is a leading economist and tax expert who holds five top professional finance, investment and accountancy qualifications CFA (USA), CPFA (UK), FCCA (UK), CA (ICAEW, UK) & Anti-Money Laundering Specialization along-with substantial experience and represents Pakistan on Global Tax Forum while sitting on the boards of several think-tanks. His profile can be accessed at: https://omerzaheermeer.wordpress.com/about