ISLAMABAD: The Senate Standing Committee on Finance, on Tuesday, took notice of names of over 700 Pakistanis in Pandora Papers for owning offshore companies, and observed that capital flight is a matter of great concern when the Financial Action Task Force (FATF) would review the country's position in the current month and where money laundering and money trail is being questioned.
A meeting of the Upper House Standing Committee on Finance was held under the chairmanship of Muhammad Talha Mahmood, and expressed annoyance over the non-participation of the chairman Federal Board of Revenue (FBR) and the secretary finance.
"I have been informed that the secretary finance is in a meeting with the International Monetary Fund (IMF),"said Mahmood, adding that the Fund has ruined the country.
The IMF should be informed about the importance of the parliament, said the chairman committee, adding that it indicates how much you are afraid of the IMF. "I will leave this time, but will take action against the officers next time for their absence from the meeting," said Mahmood.
When Senator Sherry Rehman raised the issues of offshore accounts and the historic rise in valuation of the dollar, the chairman committee termed the matter as important and said that the name of Finance Minister Shaukat Tarin was also in the Pandora Papers. The FBR will brief on the next meeting on the Pandora leaks.
The Standing Committee decided to include the issue of Pandora Paper in the agenda of the next meeting on October 22 and summoned the FBR and Pakistani journalists- involved in the investigation. Briefing the committee, the FBR official said that the prime minister has categorically stated to investigate the matter.
However, senior FBR official stated that if assets are declared then it is legitimate. Senator Rehman said that is it enough to declare an offshore company. Flight of capital is a serious issue. She further said that the FATF meeting is scheduled for October, which question money trail and money laundering.
She said that the Pakistani rupee crossed Rs171 against the US dollar, which may reach 180 according to Fitch. She said the current account deficit reached 81 percent, the FDI declined by 20 percent during the last months, trade deficit widened, while petroleum products reached all-time high in the country, which are resulting in inflation, impacting businesses and unemployment.
During the meeting, representatives of the Flour Association briefed it on the non-payment of rebate on the wheat issue from 2015 to 2017. The committee was told that 50 per cent payment was to be made by the federation and the provinces each but it was not made.
The deputy governor SBP informed the committee that there were two schemes, one for 2015-16 and the other for 2017. However, these were time barred. The finance secretary informed the committee that after the approval of the ECC, the Ministry of Finance would release the funds.
The committee directed the Finance Ministry for arranging a meeting of the SBP, the Ministry of National Food Security and Research, and the Flour Association to resolve the matter at the earliest. Dry Fruit Exporter Haji Fojan, while briefing the standing committee, said that tax notices worth Rs700 million were sent by the FBR, despite the fact that they were paying taxes every year. "We are being treated unfairly. I have given Rs5 lakh for one day to the lawyer. An item was seized and a three-year tax notice was sent based on it while saying that the earlier valuation was not correct. Goods worth millions of rupees were ruined by unnecessary delays," he added.
At this, the FBR officials said that import and export consignment is permitted. The chairman and the members of the committee said that this matter is very unfortunate as not only the importers and exporters are facing problems but it is also detrimental to the country.
Member Policy Customs said that the DG Intelligence should be called as the DG reports directly to the chairman FBR. Senator Rehman said that the matter should be made a test case and a sub-committee should be set up.
Copyright Business Recorder, 2021