ISLAMABAD: Mehmood Mandviwala, a renowned tax consultant appointed to assist the Supreme Court, on Tuesday suggested treading carefully in cases relating to the economy lest it might set unnecessary alarm bells ringing among holders of foreign currency accounts in Pakistan worth $7 billion.

“We need to deal with the matter minutely because the country’s economy is directly linked with international commerce,” observed Mr Mandviwala. “We have to move along with them also conceding the need of checks and balances since our foreign currency regime was too liberal currently,” he added.

He was speaking before a three-judge bench headed by Chief Justice Mian Saqib Nisar hearing a case relating to citizens having properties and banks accounts in foreign countries.

At the last hearing on March 14, the court had appointed renowned chartered accountant Shabbar Zaidi and tax consultant Mehmood Mandviwala as amici curiae to assist it in making rules for discouraging illegal transfer of money from Pakistan.

Apex court hints at advising government to make laws with an aim to bring back stolen money stashed abroad

On Tuesday, the court dropped hints of setting up a working group to devise proposals which can be presented to the government and parliament for making laws with an aim to bring back the stolen money stashed abroad.

“We have two questions before us to settle — how to bring back the money stashed abroad and how to stop capital flight from Pakistan,” observed the chief justice.

The court also acknowledged avoiding mess which could create problem for Pakistan’s economy in future and recalled how cases in Reko Diq and Karkay brought trouble for the country.

“Have we ever considered seriously the consequences for not paying the award money?” the court wondered and hinted that failure to pay the award might entail confiscation of assets related to PIA, etc.

“Can our economy bear the shock of the award by the international arbitration court?” the chief justice asked.

Finance Secretary Arif Khan told the court that the government was endeavouring to bring amendments to the relevant laws to identify those who possessed foreign currency accounts abroad. This exercise would help discourage draining or capital flight of country’s economy at least by 50 per cent.

Mr Mandviwala explained that difficulties for the country increased further with the freezing of the foreign currency accounts against the backdrop of nuclear tests in May 1998, adding that banks’ trust in the government was shaken badly then. This forced the government to bring a new legislation to ameliorate the economic situation, he said, adding that amnesty schemes would not help much in bringing back the money from abroad.

Governor of the State Bank of Pakistan Tariq Bajwa told the court that Pakistan had signed conventions with 123 countries that would be operative from September next after which ‘‘we could get information about foreign bank account holders of Pakistani origin’’. “Once we are able to receive information that no tax was paid on the money stashed abroad then we can learn how the money went abroad,” he said.

Published in Dawn, March 21st, 2018