TRC slams money whitening schemes

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TRC slams money whitening schemes

KARACHI: The Tax Reform Commission (TRC) has criticised the government for introducing money whitening schemes and noted in its report that “the honest taxpayers are idiots”.

The taxpayers are the most humiliated beings in Pakistan, although it is a fact that a very few of them pay their taxes honestly. But when they have no protection of life and property why should they pay the taxes?

The common argument is that the government, which is incapable of protecting the life and property of its citizens, has no right to impose or collect taxes.

Those who are not paying or paying negligibly with the connivance of corrupt tax officials command social status, societal respect and win elections, the Tax reform Commission report noted.

“After every other year, the rulers announce a tax amnesty scheme to prove that the honest taxpayers are just idiots,” the report said, which was presented in 2015.


These observations are very much related to the recently announced money whitening scheme by the government to allow investment of undeclared funds for establishing new industrial units.

The government early this month introduced the tax amnesty scheme through a presidential order. The highlight of this amnesty scheme is that only those people are eligible who invest over Rs50 million. This amount will not be questioned for the source of income. However, around 5 per cent of the amount would be payable as income tax.

Further, the scheme is only for those who start commercial production by June 30, 2024.

Surprisingly, the government has already announced plenty of money whitening schemes, despite Prime Minister Imran Khan being an opposition to it before assuming the charge.

Rehmatullah Khan Wazir, former senior member of the Federal Board of Revenue (FBR), said that the amnesty schemes were never supported by the tax authorities.

“It is against the ethics to allow concealed income at a low tax rate. This is injustice to the genuine taxpayers,” he added.


The industry already has a permanent scheme of immunity from questioning the source of income under Clause 86, Part IV, Second Schedule of the Income Tax Ordinance, 2001.

For Wazir, the PTI government had to introduce this scheme when they took over in July 2018 and were not under the International Monetary Fund (IMF) programme.

The economic managers should realise the country is under the IMF loan programme and the next tranche may be jeopardised, Wazir added.

The Tax Reform Commission comes harsh on allowing tax amnesties, saying that the forces of loot are hand in hand with the corrupt and both are flourishing in Pakistan.

Besides, in the name of ‘reformation’, the life of the ordinary people is becoming difficult with each passing day. For the rulers, the only purpose of ‘reformation’ is to extort more taxes from the people.

Nearly 40 million people are paying income tax at source, but the rich and mighty are not paying tax on their actual incomes.


Unfortunately, the FBR has failed to mention where the actual problem lies, the report noted, adding that no serious study is available to quantify the loss of revenue due to the amnesties given to the rich and mighty, non-compliant taxpayers rather than taking them to task.

“Our tax base is not narrow, but punctured and shallow tax system protects the rich and mighty, the tax revenue of billions was forgone through Statutory Regulatory Orders (SROs), as admitted by the successive FBR chairmen,” it added.



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