EDITORIAL: The Federal Board of Revenue (FBR) has issued the SRO 369(I)/2021. It is no doubt a very important amendment to the Assets Declaration (Procedures and Customs) Rules, 2019 because now it will finally become clear to the field officers of the FBR that they are not allowed to go sniffing into the money trails of the assets revealed under the Voluntary Declaration of Domestic Assets, 2018, and the Foreign Assets (Declaration and Repatriation) Act, 2019. It was precisely the element of safety provided by the said declarations that encouraged people to avail this facility despite all the fuss that was made in the press about the government allegedly baiting people with black money to declare at least some of it through this scheme so that it could promptly go after the rest. And now, even though the government doesn’t seem to have any such plans, certain actions of income tax officials seem to have caused enough commotion for the FBR to issue this amendment.
It is strange, to say the least, that his point has had to be made at this late stage. Surely, the FBR and all its auxiliary departments would have been made to understand very clearly what this initiative was all about right at the beginning. Why, then, were there reports of tax officials making inquiries about the origin of some of the money that was declared? Such actions tend to not only spook anybody who might be even remotely interested in availing such opportunities in the future, they also do no favours to the incumbent government’s credibility. Hopefully, orders will be followed this time and there will be no more need for any kind of intervention.
This whole matter of the FBR having to step in to protect, for all intents and purposes, the sanctity of but money raises deeper, and far more unpleasant, issues than just failure to correctly read the fine print in the approved Rules. That the Pakistan Tehreek-e-Insaf (PTI) government felt forced to go for the asset declaration scheme despite fiercely opposing all such things on the campaign trail shows, more than anything else, just how fragile the economic position is and how desperate the system is for repatriation of at least part of the money stashed outside the country. Things, in fact, are so bad that government after government tries to please people with a lot of undeclared wealth to make some of it public instead of hunting them down and shaking all of it out of their pockets.
FBR already has its hands full trying to increase tax revenue and help the government please the International Monetary Fund (IMF). It can do without unnecessary irritants like having to make amendments to Rules that had to be created to meet emergency situations. Perhaps all this wouldn’t have been so hard if some administration, past or present, had taken the trouble to introduce and implement reforms in the taxation machinery that most stakeholders have been crying about since at least the passage of the 18th Amendment. It seems, unfortunately, that the best that can be hoped for now is that the right lessons are being learned very quickly because at stake is not just the government’s credibility or protection of some shady characters’ wealth streams, but the bailout programme itself and the health of national reserves.
Copyright Business Recorder, 2021