Avail the Amnesty & Sleep Peacefully!

By:

Omer Zaheer Meer,

CFA (USA), CPFA (UK), FCCA (UK), ACA (ICAEW – UK), AMLE (UK)

Links of Published Versions of Article:

The PM’s Counsel:

In 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.

Changing Times:

The 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.

What 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.

Possible Nightmares:

Imagine 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?

Or 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 such instances.

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 :

Pakistan 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.

Political Will & Penalty Provisions:

Chairman 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.

The practice of holding benami property — moveable or immoveable — plays a significant role in enabling tax evasion, money laundering and terror financing.

This law 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.

The Misconceptions:

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.

Another 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.

You 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.

There 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.

Your Last Chance:

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.

Technical Overview of the Amnesty: https://omerzaheermeer.wordpress.com/2019/05/19/pti-govts-tax-amnesty-past-facts-and-the-path-forward/

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

To learn more about the amnesty or obtain professional advise:
http://www.mlcc.pk
Call: 042-37242434 / 042-37242612
Email: ozmeer@mlcc.pk




Prescription for Increasing Tax Revenues

Tax Revenue

By:

Omer Zaheer Meer,

CFA (USA), CPFA (UK), FCCA (UK), ACA (ICAEW – UK), AMLE (UK)

           Prof DP 051918 original

Links of Published Versions of Article:

Preamble:

Taxation is an extremely important source of funding for any state to finance the running of the Governmental functions. Even the oil rich Arab states recognized the importance of this and started to shift towards a lasting economy with citizens contributing to the national treasury with their share of the taxes. To put it simply, in all global economies, there is both direct and indirect taxation (in different combinations). Direct taxation is a tax directly levied on an individual or institution’s income while indirect taxation entails taxes on products and services whereby consumers are made to pay taxes when they consume these.

Taxation is therefore an essential subject warranting attention from all concerned. In this write-up we’ll identify key issues in this regard and propose solutions to solve them amicably which have been presented by this writer at various think-tanks and as Chairman of taxation committees of key professional bodies such as ACCA. These have been published and publicized but unfortunately still awaiting implementation by the decision makers.

In developed countries, realizing that taxation is necessary for providing them with necessary facilities, most citizens contribute their share to the state finances. The situation is different in developing countries, being marred with corruption and mismanagement; there is a lack of public trust by the masses demanding evidence of delivery before they’re willing to pay their due share. As if that wasn’t enough the subjective nature of taxation laws resulting in harassment and the structural tilt towards indirect taxation further erodes the confidence of the populace in the taxation system.

With all the natural resources at our disposal, a high proportion of population being young and hardworking and with cheap labour availability, a fairer system of taxation culminating into a fairer economic policy can provide the necessary environment to harness the economic potential of Pakistan

As a result of the above, the unresolved challenge faced by Pakistan on the taxation revenue shortfall front isn’t that surprising. A culture of tax avoidance has long engulfed the business horizons. An ongoing cat and mouse fight between the tax authorities and the taxpayers, with the later believing that it would be a waste to pay off their tax bills due to the deep pockets of the corrupt government officials, harassment emanating from the taxation system and/or lack of public services. The FBR officials, on the other hand, feel overwhelmed and underappreciated with issues of career paths, promotions and understaffing.

While the FBR officials rightly point out that no state can perform the necessary duties with the empty coffers, the tax payers also strongly put forward the argument that they don’t see any real delivery of essential services but instead are greeted with stories of herculean corruption rife all around coupled with undue persecution once they enter the tax net. Hence, there seems to be a massive break-down of trust between the taxpayers and the “tax-man”.

This serious trust deficit in Pakistan has lead to a difficult situation where finance ministry overemphasizes on indirect taxation to try to bolster its coffers.  Unfortunately this approach has serious negative ramifications for Pakistan’s economy and people which has manifested in worsening the already declining economic situation of the country.

Another misconception is that since only 0.66% of the total population files their income tax returns, hence majority of the people do not pay any taxes. On the contrary, Pakistanis are taxed indirectly on just about everything. However, this way of collecting taxes indirectly leads to a regressive system where those earning more pay a lower proportion of their income as taxes and it results in inflationary pressures within the economy as the increased costs translates into increased prices for just about everything including the commonly used commodities. The effects are hyper-inflationary in nature because there is a multiplicative rather than an additive element in the inflation passed-on at every level.

The mess created by the taxation policies pursued by the previous governments needs to be undone. What is critical to achieving the success in taxation reforms is to restore the faith of the taxpayers by implementing a multi-dimensional tax reforms agenda, where:

  • The biggest harassment tool of the “fishing” audits should be eliminated. Instead the audits should be limited to the cases where either there is specific information and/or the taxpayer is taking some benefit from the state such as an exemption or refund.
  • An alternate can be the introduction of an incentive based system introducing an option of no audit in case of payment of 25% higher tax compared to last year. Such measures have proven to be success in the past.
  • Focus should be shifted on using e-systems like “STRIVE” for verification of withholding taxes and their deposits in the treasury.
  • Issues of FBR such as under staffing, lack of full automation and career prospects along-with just compensation should be properly addressed.
  • Taxpayers should be facilitated by making the processes easier and fairer, focusing on maximum automation in order to stem out corruption.
  • Instead of increasing the tax rates the tax net should be constantly widened.
  • More focus should be given to direct taxation, with more affluent contributing more to the treasury.
  • Meaningful tax rebates and reliefs should be introduced for the less able sections of the society.
  • Certain exempt sectors should be brought into the tax-net (subsidies can be given for assisting any under-pressure areas).
  • Tax rebates and incentives should be focused to encourage foreign/local investments in key sectors with tax-breaks for transfer of technology, e.t.c. as may be required in a particular sector.
  • Tax money should be seen to be actually spent on public welfare and infrastructure projects, which will improve the spending capacity and the business environment in Pakistan.
  • The massive corruption in public contracts/projects, now routinely in the range of 20-40% of tender values, should be eradicated for better and efficient use of public money through revamping the pay and accountability structures.

With all the natural resources at our disposal, a high proportion of population been young and hardworking and cheap labor availability, a fairer system of taxation culminating into a fairer economic policy can provide the necessary environment to harness the economic potential of Pakistan.

The key reforms outlined above, if properly implemented, can resolve the current enigma facing the treasury. Should such reforms be made with reliance on local resources and a will for change, there is no reason, why Pakistan cannot stand on its own feet and become an economic hub not only for the region but the whole world.

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

 

PTI Govt’s Tax Amnesty:  Past facts and the path forward

Tax Amnesty

PTI Govt’s Tax Amnesty: 

Past facts and the path forward

By:

Omer Zaheer Meer,

CFA (USA), CPFA (UK), FCCA (UK), CA (ICAEW – UK), AMLE (UK)

IMG-20180911-WA0016.jpg

Links of Published Versions of Article:

Tax Amnesties in Pakistan:

The first ever and one of the more successful tax amnesty schemes in Pakistan was launched during Ayub Khan’s era in 1958. It resulted in a collection of approximately PKR 1.12 billion which equaled to US $ 0.24 billion approximately and around 71,289 people came within the tax net by making declarations. General Yahya Khan also launched a tax amnesty scheme in 1969 but ended up adding only 19,600 taxpayers with declared assets of just PKR 920 million. Zulfiqar Ali Bhutto’s tax amnesty in 1976 saw the number of people declaring assets decline drastically with assets worth only PKR 270 million declared. The scheme by General Zia’s government was a disaster. The PMLN government’s tax amnesty scheme in 1997 could add assets of PKR 141 million only.

In 2000 General Musharraf’s amnesty resulted in assets declaration of $3 billion approximately and has been the most successful one in terms of revenue collection. Prior to this, in the three tax amnesty schemes by PML- government, only 128 people declared their assets. Later on, PMLN’s 2016 tax amnesty saw just 10,000 declarations and a meager PKR 0.85 billion declared. However, the 2018 amnesty by PMLN was able to garner closer to a $ 1 billion but didn’t result in any significant change in the tax compliance culture. This shows that the disease of tax evasion and the curse of black money has been engulfing Pakistan since its early years.

Recently, there has been a lot of hue and cry over the Assets Declaration Ordinance, 2019 by the Pakistan Tehreek-e-Insaf Government that is commonly referred to as the “Amnesty Scheme”. The opposition has termed this as an opportunity for the near and dear ones of the Government to whiten their “black monies” which is factually incorrect as the political office holders and those related to them are barred from this scheme. Similarly, the opposition is also claiming it to be a copy of the amnesty scheme introduced by PMLN. As a result of these accusations, there is a lot of confusion as to what exactly is this scheme, is it any different from the last one by PMLN Government and whether it can help the stated objective of helping in the widening of the tax base. Let us briefly examine these questions in this write-up in an objective manner.

 Overview of the Assets Declaration Ordinance, 2019 (The Amnesty):

The above titled ordinance has been promulgated allowing undisclosed, unreported and/or under-reported assets, sales and/or expenditures upto 30th June 2018 and/or the “benami” assets acquired or held on or before the date of declaration to be legally declared for the payment of very low “taxes”.

The Scope is clarified in the section “3” of the ordinance as below:

“Subject to the provisions of this Ordinance, any person may make, on or before 30th June, 2019, a declaration only in respect of any—

  • undisclosed assets, held in Pakistan and abroad, acquired up to 30th June, 2018
  • undisclosed sales made up to 30th June, 2018
  • undisclosed expenditure incurred up to 30th June, 2018; or
  • benami assets acquired or held on or before the date of declaration;”

“The Prime Minister still enjoys tremendous trust in his personal integrity and also retains his charisma, but the general atmosphere of uncertainty is severely damaging”

Important Conditions for the Declaration

  • Any cash held in Pakistan which is to be declared will have to be deposited into the declarant’s bank account(s) and kept in the account(s) till atleast June 30, 2019.
  • Any foreign liquid assets repatriated to Pakistan under the scheme are required to be deposited into declarant’s own bank account(s) locally or invested in Pakistan Banao certificates or any foreign currency denominated bonds, issued by the Federal Government.
  • Any foreign liquid assets declared but not repatriated back to Pakistan under the scheme, in addition to being taxed at higher rate, must be deposited into the declarant’s foreign bank account(s) on or before 30th June 2019.

The Exclusions

Importantly, the ordinance or as it is commonly referred to as, the amnesty is not applicable to the following:

  1. holders of public office and their dependents as well as any of their benamidars if applicable,
  2. a public company as defined under clause 47 of section 2 of the Income Tax Ordinance 2001;
  3. matters where proceedings are pending in the court of law,
  4. matters where the proceedings have attained finality under the respective tax laws,
  5. matters where the proceeds or assets involved are derived from a criminal offence,
  6. gold and precious stones,
  7. bearer prize bonds and
  8. bearer assets

TAX RATES AND VALUES

 

Class of Assets/Income/

Expense

 

Value

 

Applicable

Tax Rates

 

Domestic Immovable Properties – Land

Higher of the 150% of value prescribed by the FBR under section 68 of ITO or 150% of DC value

 

1.5%

Domestic Immovable Properties – Constructed Atleast 150% DC value where FBR value has not been notified for constructed property 1.5%
 

Foreign Liquid Assets not repatriated

Higher of the Fair Market Value or cost, determined using  exchange rates prevalent at the  declaration date.

 

6%

 

Foreign Liquid Assets            Actual Value  Repatriated

 

                                4%

 

Unexplained Expenditure

Higher of the Fair Market Value or cost

 

4%

 

Undisclosed Sales                   Actual Value

 

                                 2%

 

All assets except domestic immovable properties

 

                                 4%

Timeline

While the declaration needs to be made by 30th June 2019, the tax can be deposited later by paying additional amount of default surcharge other than the tax rates discussed above, as outlined below:

Default Surcharge

 Sr. No        Time of payment of Tax

 

 

Default Surcharge Rate

1.       01st July 2019 to 30th September, 2019

 

   10%

2.       01st October 2019 to 31st December, 2019    20%
3.       01st January 2020 to 31st March, 20120     30%
4.       01st April 2020 to 30th June, 2020     40%

Miscellaneous Provisions:

Confidentiality

While maintain confidentiality of declarations under the ordinance is required but unlike the Previous Scheme, there are no provisions in the Ordinance for imposition of fine / for imprisonment of any person in breach of confidentiality provisions.

Protection from Prosecution

The contents of the “amnesty” declaration(s) cannot be admitted as evidence(s) against the declarants(s) for the purpose of any proceedings relating to imposition of penalty or for the purpose of prosecution under any law.

 Anti-Abuse Provision

An important anti-abuse provision, which was not included in the previous scheme by PMLN is that the declarants won’t be able to claim any allowance, credit or deduction in respect of the assets declared and incorporated in the books in consequence of such declaration. In simple terms, this would mean positive impact re tax compliance in future.

Key differences as compared to the PMLN’s Amnesty:

Below are the key differences of this current “amnesty” scheme as compared to the PMLN Government’s amnesty scheme:

  1. The requirement to deposit any cash in local or foreign bank accounts would mean that the fraudulent declaration made by exaggeration with the hopes of continuing the mal-practices in future with having the “buffer” of excess declared cash to “cover” the future revenue streams would end.
  2. The anti-abuse provision discussed above.
  3. Inclusion of broader categories of income streams, assets, expenses and sales within the scope.
  4. More impetus of fairer and market values as evident from 150% of FBR or DC values’ requirements mentioned above.
  5. Comparatively higher rates of tax.
  6. Introduction of timeline for “late” payments with default surcharges.
  7. Lack of penal clause in case of the breach of confidentiality.
  8. Some of the exclusions.

 The reservations, impact and the way forward:

There is a well supported argument that any amnesty, generally speaking sends out a wrong message to the masses and businesses in particular as effectively the wrongdoers ends up getting a better deal without any severe reprimand. This has psychological and practical ramifications for compliance in the long term.

However, at times the economic situation does require the use of such schemes. There were other better options to achieve the stated goals of this scheme. However, there are certain things which are positive about this scheme including the requirements to deposit the cash in the bank, the focus on fair market values, introduction of later payments with default surcharges and the anti abuse provision. Certainly, there is always room for improvement and this scheme could have been made even better.

The most important challenge however would be to address the uncertainty. While, Prime Minister Imran Khan still enjoys tremendous trust in terms of his personal integrity and also retains his charisma, the general atmosphere is one of uncertainty which is severely damaging. Unfortunately, this is mostly stemming from an un-accountable media spree of speculations and negative reporting in general baring a few exceptions. To make the point, let us recall that the last amnesty by the PMLN Government only really took off when the CJP announced that the court was not to review it leading to the confidence of the potential declarants. So firstly, this uncertainty needs to be curbed for this scheme to be successful.

Secondly, the relevant authorities need to run public campaigns and demonstrate that they have 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. Announcement of such a compliance drive with details of the penalties and timeline, widely publicized in the print and electronic media as well as on social media and along-with the curbing of the uncertainty can and will lead to the success of this scheme.

 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

Technocrats Crises in PTI Government: Problems & Solutions

Links of Published Versions of Article:

Technocrats Crises in PTI Government:

Problems & Solutions

 By:

Omer Zaheer Meer

CFA (USA), CPFA (UK), FCCA (UK), ACA (ICAEW – UK), AMLE (UK)

Prelude:

The economy of Pakistan is in a quagmire with many naysayers painting a doomsday scenario. They’d like you to believe that rock bottom has been hit and there’s no way out. But that’s not true. The change promised by Prime Minister Imran Khan is very much deliverable. His famous and often quoted claim of a 100% increase in taxation revenues is practical and achievable. The solutions are there, out-of-box solutions which “Status  Quo” advisors & bureaucrats would never be able to conceive and/or want to implement. Read on to know more about it.

The fortune and the misfortune:

PM Imran Khan is very lucky as he has a repute of being extremely honest, hardworking and well-meaning. Even his political opponents admit this in private and try to criticize him by attacking his currently deputed team(s). It is a strange predicament for the reasons outlined below.

PTI is also very fortunate political party as it has accumulated the finest of talented Pakistanis including lot of able and proven technocrats. These are the same people who used to stay away from even casting their votes let alone getting indulged in politics. But to his credit, PM Imran Khan changed their way of thinking and made them believe in change. To appreciate the magnitude of this blessing, just realize this that even Zulifqar Ali Bhutto or our great Quaid e Azam did not have as many talented people at their disposal. They had to make do with whatever was available. Our father of the nation himself termed the people he had in his team as mostly “khote sikke”.

There is however a problem. There is no bridge between the PM and the talented people in PTI with the same fire in their hearts as him and the same faith in his vision and leadership as he do.

During its opposition years, the PTI established a shadow cabinet by the name of “National Policy Council”. It had different teams, each headed by a top technocrat to work on the challenges for specific key ministries

Nearer the Church, farther from God:

While, PM Imran Khan is working tirelessly to make things happen and for this looking everywhere to bring in people with technical expertise, for some unknown reasons, the same is overlooked within his party. The insiders within PTI circles confide that the appointments being made are largely based on groupings sans any merits with people having no technical expertise been nominated on highly technical positions in contradiction to the PM’s own vision.

Non-technocrat political workers can and should be accommodated in thousands of non-technical positions. The technical positions however should be left for the technical members of PTI for these positions not only demand highly specialized skill sets but will also determine the outcome and legacy of PM Imran Khan’s government.

There should be a mechanism to identify and link the technocrats within PTI with the leadership in a non-partisan manner. Perhaps, some neutral technocrat within PTI would be best suited for this endeavor to avoid groupings and factions impacting the process.

The three keys to success:

There are three key requisites for success in achieving the PM’s dream of reforms. Normally the discussions about reforms and particularly the keenly discussed topic of reforming the revenue authorities and infrastructure, focuses on competency of key personnel, which is certainly important. What’s missing though, are couple of other equally vital bits.  They’re:

  • party affiliation so there is belief in the vision of the PM and
  • out of box thinking of a doer

The Enigmatic Resemblance:

There’s an uncanny resemblance between the untapped Pakistan with all the gifts of the nature, be it gold, copper, oil, coal, e.t.c. or the unexplored potential of tourism and PTI as a political party filled with all these untapped gifted professionals waiting to be utilized for the good of the country. This resemblance is enigmatic.

Like the symbols, the cures of the diseases are also similar. PTI, just like Pakistan, needs to explore its untapped resources of great minds of technocrats within.

The Reworked Bhutto Solution:

Despite all his ills and issues, Bhutto is normally billed as a genius; some even call him an evil genius for that matter. Irrespective of which side of the divide you are, one thing is for sure that the man knew politics and ground realities of South Asia.

Isn’t it astounding that almost four decades after his demise, he’s still alive in the hearts of millions despite all that unruly and disastrous stuff that has been done in his name, more so in Sindh than elsewhere? What is the magic about him then? Well there are a few. We’ll be discussing briefly the one concerning the topic at hand.

Bhutto famously appointed PPP workers at all key positions claiming that as people voted for his party to implement the agenda, only those loyal to that agenda can help achieve that. He questioned the loyalty and “merits” of the bureaucracy, e.t.c. He did go overboard to the extreme of appointing people solely on the basis of this criterion, leading to often incompetent or illiterate persons on key positions. Still, lessons derived from this can be used to put in motion the “reworked Bhutto solution”.

PTI’s Technocrats:

The solutions should simply involve using a mechanism to identify top quality technocrats within PTI and appointing them at key positions to implement PM Imran Khan’s vision. Care must be taken to ensure that technical competence, relevant experience, out of box thinking, knowledge of the local workings and a proven track record are there. It is vital that the processes be built and run by able technocrats within PTI and not those bound to oblige their groups sans merit.

FBR’s new Chairman:

Just this week, the new Chairman of FBR was announced and notified amid much hue and cry. Mr. Zaidi, a respected Chartered Accountant having no known previous affiliation with PTI and an ex Cabinet Member of the Caretaker Sindh Government setup primarily nominated by the PPP, was the choice. This speaks volume about the problem we’ve been discussing.

The idea was that someone “neutral” and “competent” from the private sector must be tried, having already tried both customs and income tax group officials as well as bureaucrats from other segments, without anyone delivering the “success” and “reforms” desired. However it resulted in two major issues.

The first problem stems from the manner in which this was executed. It’s hard to imagine how nobody was able to point out the famous “Ali Arshad Hakeem” case and take the then incumbent Chairman FBR as well as the board members into confidence before the announcement.

PM Imran Khan, being his bold and confident self, did the best possible to salvage a dire situation.

More importantly, this perfectly showcases the issue of being “nearer the church, farther from God”. The appointment practically meant that PTI felt it did not have anyone of a caliber matching Mr. Zaidi let alone be better. With all due regards to Mr. Zaidi, that is not the case and this is why PTI needs to get its house in order.

PTI National Policy Council Revenue Team:

During its opposition years, PTI established as shadow cabinet by the name of “National Policy Council”. It had different teams, each headed by a top technocrat to work on the challenges for specific key ministries. I was honored to Chair the “Revenue Team”.

Link of National Policy Council Notification

As Chairman of this team, I should disclose that PTI had a full fledge Revenue team working on reforms agenda which continuously and successfully assisted the leadership for several years including during the tough period of being in opposition. The work involved besides other areas, identifying both the major issues and their solutions concerning our taxation framework. Some of the proposals were even shared with other countries in a similar state of affairs as Pakistan at Global forums and these were hugely appreciated. This untapped treasure of PTI should be utilized and implemented. The details of such proposals shall be shared in my future write-ups so keep watching this space.

 Omer Zaheer Meer is a leading economist and tax expert who holds five top professional finance, investment and accountancy qualifications including anti-money laundering specialization along-with substantial experience and represents Pakistan on Global Tax Forum. His profile can be accessed at: https://omerzaheermeer.wordpress.com/about

 

ACCA MNP Meeting

Dear Readers,

This is to share with you that I chairmed a very positive and productive meeting of the ACCA MNP.

Below is a summary of the non-confidential proceedings:

Major challenges, opportunities, strengths and improvements were discussed for betterment of the profession and wider society with a positive impact for our beloved Pakistan while also creating positive global impact.

Major breakthroughs, initiatives and proposals put forward at the IA2018 were shared with MNP members.

Relevant committees and societies’ tasks and targets were also finalized along with some other initiatives being put in motion.

Taxation Committee’s works were shared, being already in motion.

Key initiatives including, Thursday Huddles, Employer Engagements, Regulator Engagements, e.t.c. were also recommended to be given increased impetus.

Feel free to share your suggestions.

Sincerely,

Omer Zaheer Meer

Communicating Members’ Voices – Meeting with ACCA CEO

Communicating Members’ Voices – Meeting with ACCA CEO

Dear Readers,

Peace be on you all,

Had a very productive meeting with Ms. Helen Brand, CEO of ACCA, the largest global accountancy body in human history. In all my interactions, I’ve always found her to be very articulate and a methodical professional, yet at the same time being a very humble and friendly person.

Vital proposals regarding ACCA fraternity and brand, culminated from the feedbacks of the members and the collective wisdom of representatives, were shared and discussed at length with her and Sundeep Takwani. Sundeep is also an impressive professional.

Although it was peak period professionally, the importance of advocacy and contributing to my Alma-mater & wider society meant that I took extra time off work. And it was well worth it. The contents of the discussions were confidential, but let me share that ACCA believes in Thinking Ahead so look forward to the exciting times and initiatives ahead.

SAJJEED ASLAM, FCA arif mirza Ayla Majid Brian McEnery

 

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A Visit to the Scottish Parliament – Lessons in Democratic Norms

Dear Readers,

Peace be on you all,

In this post I’m sharing a fantastic experience of witnessing a true modern  democracy at work during my visit to the Scottish Parliament. When I reached, there were a couple of small protests going on right in front of the main entrance of the Parliament.

With people protesting outside, the parliamentarians kept addressing the issues inside in the debating chamber in front of their electorate. The openness, transparency & accountability while giving respect to the voices of the voters, is how it is supposed to be.

Giving respect to the masses while holding the representatives accountable is the true essence of a real democratic system.

It is a lesson for countries all over the world. What’s worth mentioning here is that although Romans had a semi-democratic setup, that was largely selective. The first model of a true modern democratic setup was established by Prophet Muhammad PBUH in the state of Medina.

Let’s hope we get to see further improvements in democratic setup of Scotland and the rest of the world.  I’ll now sign off by sharing that the Scottish people are very friendly and have a good-nature.

Enjoy the pictures below and see you here soon with the next blog post.