CONFUSION persists around the question of ‘ill-gotten gains’ of Pakistanis kept in Swiss bank accounts. This week negotiations will take place between Swiss and Pakistani tax authorities to amend the double taxation treaty.

The Swiss envoy to Pakistan has reportedly said the talks are “just a technical meeting” to upgrade an existing treaty to avoid double taxation between the two countries.

Also read: $200bn of Pakistan in Swiss banks: Dar

Meanwhile, in Pakistan an expectation has developed that the talks are a step towards creating the legal architecture necessary to enable the identification and retrieval of ‘ill-gotten gains’, a vague term that has come to describe tax-evaded money as well as money generated from illicit activity.

In fact, the law makes a distinction between these two categories, and that distinction is important because only illicitly acquired funds can be restituted. For tax-evaded funds, information can be exchanged but that “does not mean Switzerland can help in tax collection”, the envoy is quoted as having said.

A needless haze of confusion surrounds the issue in Pakistan. The false and fabricated figure of $200bn of Pakistani money ‘stashed’ away in Swiss bank accounts continues to be bandied about, despite having been shown to be a myth. But beyond the amounts involved, confusion also surrounds the steps required to retrieve these funds in part because of mixed messages given by the government itself.

In May, the finance minister told the National Assembly that the government intends to pursue illegal assets stashed away in Swiss bank accounts “by amending/renegotiating the existing Pak-Swiss Tax Treaty”. Many understood this statement to mean the current talks will be part of a larger effort to locate and retrieve ‘ill-gotten gains’. But the envoy’s words suggest the talks are only about updating the legal framework so information on tax-evaded wealth can be exchanged. In equal part, the confusion exists because corruption and the siphoning away of ‘ill-gotten gains’ is a politically sensitive issue in Pakistan, especially in the current environment, and even the coarsest of nuances are bulldozed over in the rush to judgement.

Since those perpetuating the confusion draw on a statement made in the National Assembly on the finance minister’s behalf, perhaps Mr Dar should clear the air by saying what his best information is about the amounts stashed abroad, and by clarifying the steps his government is taking to locate and retrieve those funds.

Published in Dawn, August 27th, 2014