This blog is written by Mr. Sachal Aftab Khan, Associate Taxation and Corporate Services. Please read this interesting piece of skillful written composition and provide your valued comments.
Rags Repatriating Riches
Since April 5, 2018 the people of Pakistan are indulged into a debate which has turned into whirlpool of public finance. The whole saga shook the fiscal fabric upside down with just two shady words “Amnesty Scheme”.
Ab initio, these amnesty schemes are never welcomed in fact they always ignite common man with emotional dilemma against the state, in whole, the concept strikes them like divine curse, burning their hard earned trust on the system into ashes. General public’s sweat earned money is questioned as they pay higher tax rates, keeping their finance affairs documented all the time, and exhibit their patriotism in this way. And with the implementation of such magical laws everything on the side of layman is shattered. Mostly his confidence in the state’s systems is questioned.
Yet, the mighty get amnesty after amnesty every time their offshore buckets are filled to the point of overflow with every object with which their net worth can be measured. Big 4 reap the most by providing wealth advisory to UHNWI for covering their assets and growing them at a consistent pace sustainably, while they sip martinis in Davos & keeping the assets hidden. International investment banks run their highly lucrative WMDs advising UHNWI for their staggering US$283.4 trillion (as per Asset & Wealth Management Report by PWC, published in May, 2017). So yes if you are Finance, Accounting, Corporate Law or especially in Tax Advisory, you are at the right side of the equation but in murky environment.
For better understanding consider this, World GDP in 2017 was $79.3 trillion (Source OECD), in its comparison the wealth possessed by UHNWI stands at US$283.4 trillion, which indicates that individuals are 3.5 times richer than the businesses in the world. Year on year analysis indicates an increase of US$ 5.6 trillion in their wealth. So this way it is quite obvious that people are much wealthier than the nations, they belong to.
All those numbers are glitzy and fancy when no one is to be blamed but as soon as someone from this alpha group comes into media’s spotlight frenzy, it brings chaos on the brat, bad PR, illicit dealings exposed, shady transactions all of it substantially affects their net worth by jettisoning it southwards. Nose diving share price of their holding companies, triggering paparazzi nightmare.
These problems required a way to overcome this financial Armageddon, hence, an innovation came into play. Such a play is also taking place in our beloved homeland. Where the Fiscal Synagogue of the country, FBR, came up with this innovation to be used for repatriating the much needed wealth in a way that turns into a Win Win situation for both, the declarant and the Taxman.
So far, nearly $25 billion have been documented using this tool and almost $ 1 Billion revenue in taxes has been generated under the purview of this scheme. And still 48 Hrs to go. Its popularity made it so lucrative that the government had to extend it for a month and it worked. Now suddenly many bigwigs who were below taxable limits became billionaires legally and can justify the lifestyle they were questioned for. Businessman were able to route the locally generated wealth into FDI, to gain lucrative Tax Breaks for decades to come and yes it’s their favor on the country against sovereign guarantees , which is again the most safest investment to be made in a third world nation.
Sachal Aftab Khan