PTI, PPP trade barbs over sugar mill owners

Published August 9, 2019
Senior members of the ruling Pakistan Tehreek-i-Insaf (PTI) and the opposition Pakistan Peoples Party (PPP) on Thursday accused each other of sheltering sugar mill owners on manipulation of its pricing mechanism because of their influence over the top political leadership. — Umair Ali/File
Senior members of the ruling Pakistan Tehreek-i-Insaf (PTI) and the opposition Pakistan Peoples Party (PPP) on Thursday accused each other of sheltering sugar mill owners on manipulation of its pricing mechanism because of their influence over the top political leadership. — Umair Ali/File

ISLAMABAD: As estimates of wealth stashed abroad by Pakistanis boiled down to just $5-7 billion from a whopping $200bn, senior members of the ruling Pakistan Tehreek-i-Insaf (PTI) and the opposition Pakistan Peoples Party (PPP) on Thursday accused each other of sheltering sugar mill owners on manipulation of its pricing mechanism because of their influence over the top political leadership.

The politically hot issues came up for discussion at a meeting of the National Assem­bly’s Standing Committee on Finance, presided over by former finance minister Asad Umar.

Federal Board of Revenue (FBR) chairman Shabbar Zaidi and chief of international taxes Ashfaq Ahmad told the panel that Pakistan had received data from 41 countries and vice versa about assets of Pakistanis abroad under agreements signed with OECD (Organisation for Economic Cooperation and Development) countries for automatic exchange of information.

Mr Zaidi said the government would be able to exchange such data with 80 countries by Dec 31 this year. He said the top 378 Pakistanis in the list had foreign assets worth $5bn — almost 78 per cent of the total wealth.

Mr Ashfaq said the cases involving $100,000 or above were about 3.44pc of the total number, but involved 94.37pc of the reported account balance.

Estimates of wealth stashed abroad by Pakistanis come down to $5-7bn from a whopping $200bn

The total amount involved may be close to $7bn, the FBR chief said.

When Asad Umar asked what action had been taken against the 378 big fish who appeared to have held about 80pc of the total assets, the FBR representatives said that about 115 such persons had availed tax amnesty last year and 72 this year, while 19 cases had been disposed of after creating a tax demand of Rs1.64bn, of which Rs888 million had been recovered.

The NA committee was informed that data about 1,980 persons had been received and notices issued to 453 of them. The relevant commissioners had been given a deadline of Oct 31 to complete investigations into the remaining 1,527 cases. In all, data about assets and accounts of 152,000 wealthy Pakistanis had been received. Asked as to how many of them had filed tax returns, the FBR team said the response could be made available after two days because the last date for filing of returns had been extended to Aug 8.

Mr Zaidi said the information received under the OECD convention also had many limitations because of similar names, wrong addresses or so on and formal requests were being made to partner countries to share full details. He explained that full details from the UAE about Pakistanis’ assets were not available so far but he was pursuing with those authorities to break that barrier under which the UAE was not sharing information about iqama holders — considering them as their own residents.

PPP’s Nafisa Shah said if the assets abroad were just $5-7bn, then PTI’s all claims about $200bn assets of Pakistanis abroad were wrong and wondered how much of those funds had been brought to Pakistan as claimed by the party in power.

Mr Umar said the $200bn was not the PTI’s number but was reported by former finance minister Ishaq Dar in the National Assembly.

The panel was informed by the Competition Commission of Pakistan (CCP) that sugar prices had increased by over 26pc (Rs15 per kg) over the past one year and sugar mills were found involved in cartelisation and collusive practices at three levels during a previous inquiry.

Asked by Mr Umar if the CCP had also examined the allied earnings of the sugar industry, including ethanol and power sales, because these were the areas where the industry must have earned huge profits due to devaluation, its chairperson and members explained that allied earnings of the sugar industry were not looked into, but suggested that support price for sugarcane should not be based on weight but on sucrose content.

Mr Umar said there was apparently no reason for increase in the sugar price.

Nafisa Shah said no action could be taken by the CCP against sugar mills for such collusive practices and price manipulation because top political leaderships were controlled by ATMs (financiers) of sugar mill owners. “This would never be investigated,” she added.

At this, Mr Umar quipped that it was also evident from the fact that sugar mills were previously studied in 2009 and wondered why no action was taken for the next 10 years.

Ms Shah said the ATMs from sugar mills were sitting on the right and left of the leadership of all political parties, including the current prime minister.

Mr Umar said they had raised the issue of ATMs in his party and it was after 10 years in the PTI government that the CCP was once again investigating the issue. “We had also taken it up in the budget and also raised points of order,” he said, asking Ms Shah to also raise a point of order on the issue and his party would support that.

Ms Shah agreed to bring a point of order in the National Assembly, but wondered what action the CCP had taken against such manipulative practices.

Mr Umar said former president Asif Ali Zardari also had many sugar mills and the CCP should also report if notices had been issued to him or imposed any fine.

Ms Shah said Prime Minister Imran Khan was also controlled from left and right by ATMs and how many fines had been imposed on them.

The committee directed the finance ministry to expedite the process of 50pc reduction in Gas Infrastructure Development Cess, particularly for the fertiliser sector, as decided by the cabinet in January this year.

Mr Umar said the matter decided by the cabinet should not have been delayed so long.

It was reported that the Pakistan Flour Mills Association (PFMA) was engaged in fixing the prices of flour and provided its members a platform to exchange commercially sensitive information and strategic data on flour prices, which was prima facie collusion and cartelisation.

Published in Dawn, August 9th, 2019

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