LAHORE: Shabbar Zaidi, the former chairman of the Federal Board of Revenue, said 70 per cent of the entire tax collected in Pakistan was paid by just 300 companies, giving a shut-up call to the businesses who brag about paying taxes.
“I know very well who pays how much tax. The collective tax of all the bazaars of Lahore is less than only the Liaqatabad Bazaar of Karachi.”
Shabbar Zaidi was replying to the claims of his fellow panelist businessman who made claims of paying tax, saying there were too many taxes in Pakistan and no dividends.
The talk was going on in a session on ‘Taxation and Development’ moderated by Prof Sher Aghan Asad of LUMS on the concluding day of the EconFest held by PIDE at Alhamra Art Centre on Sunday.
Mr Zaidi said the real estate was ‘the parking lot’ of untaxed money. “With the support of the DHAs and army, we have developed a system to officially untaxed money. The real estate has got perpetual amnesty in the country.”
Calls for removing DHAs from the real estate business
He said as the FBR chairman, he had taken steps to discourage tax on the real estate and business of the “files” of the plots had stopped. I was called by the chief of army staff and he had complained against my steps, saying it (DHAs) was the business of ‘their people’. He said ultimately, the DHAs would have to be removed from the real estate business as there could not be business “if a state institution with all the power in the competition (of real estate) in the private sector”. He said there could not be checks on DHAs and you could not even tell who and who were the owners of the plots there.
Shabbar Zaidi said “when plots became parking lots, they get out of reach of the poor sections of society”. He suggested that “if construction is not done on a plot of land, it should be confiscated” while the GORs and Governor House should be done away with.
Ikramul Haq, the columnist and lawyer, said the land worth billions of rupees owned by the government was in cities and Pakistan was not out of the colonial hangover. He said the PAS, earlier called DMG, had destroyed the country’s economy, followed by the judiciary besides the establishment.
“There are so many amnesties, so many DHAs where property business is done. There is hardly any city left in the country where there is no DHA because nobody asks a question (from the investors in the DHA).” He lamented that there were frequent amnesties on declaration of assets and there was haphazard taxation on extra plots of land.
Kashif Anwar, the president of the Lahore Chamber of Commerce and Industry, said he was pro-amnesty because he had kept the capital in the country and those should be held accountable who took their money abroad. He suggested there should be amnesty on undeclared foreign reserves to bring money back to the country. He said there is ‘grey money’ because the system did not let the people declare their capital. He pointed out corruption and mismanagement in the FBR and complained that there was too much taxation on businesses and no privileges.
Law, Justice and Economy:
Former chief justice of Tassaduq Hussain Jillani says the criticism of the Supreme Court for messing up big corporate cases is justified as the judges are not expert at finance and economics; however adding that another reason for the mess is a large number of cases.
He was replying to a question about the famous cases of steel mills, Royal Palm, Reko Diq etc which, in the words of the moderator, caused economic havoc. The session on ‘Law, Justice and Economy’ was moderated by Faisal Naqvi. Lawyer and novelist Osama Siddique was the other panelist.
The former CJ said he had suggested formation of commercial benches in the SC as well as the high court for the kind of cases mentioned above.
He gave an example of the Orange Line case in which the high court stayed the proceedings and suspended the work and the case was decided by the SC after a year. He said the then governor of the State Bank of Pakistan Ishrat Hussain had shared the figures how much Pakistan had lost due to stay orders.
Mr Jillani said both the bar as well as judiciary were responsible for the absence of commercial benches. He said SC should take up limited cases for hearing. Regarding the suo motu cases, he said when he was the chief justice he had taken only one suo motu notice that was of a blast at a minorities worship place in Peshawar.
Osama Siddique stressed that there could not be legal reforms without political economy and the institutions, leadership and many other things were responsible for lack of reforms.
“There are three stages of reforms in Pakistan, complete utter denial and even when they accept the issue, the claimed to have found the solution which is a kind of smugness.” Later comes the stage of acceptance of the issue as well as failure to resolve it and then the process restarts again from scratch, he added.
When asked why the laws affecting the business community were not being changed, Siddique said the parliament did not consider the corporate sector important until it had its own interests attached with it. He discussed the law of arbitration and reforms. He suggested that there should be a scientific database system to manage cases in the courts under the judges, adding that such systems existed even in the countries like Thailand and the Philippines.
Ammar Ali Jan, the general secretary of Haqooq-i-Khalq Party, said the local government in the country existed only ‘in absence’. He gave an example of polluted water in working class areas and the common people could not go to Water and Sewerage Agency (Wasa) and for raising a voice and get their issues resolved, they needed local government representatives. He said the MNAs and MPAs were legislators and they could not deal with day-to-day local issues of the mohallahs.
He was speaking at the session, Local Government: A Panacea, moderated by Ahmed Iqbal Chaudhry.
Jan said the “dera culture” of local illegal powerful people was filling the vacuum left by the local government. He said it was suitable for the institutions if LG elections were not held and the LGs were hated by both bureaucrats and MPAs/MNAs for having had deeper penetration in the local population.
Prof Saeed Shafqat of the FCC said in 2013, the politicians had revived the commissionerate system, going away from the local government. He said legal structure never came out of the colonial era laws. He said all institutions and parties were a product of the colonial era and colonial rulers were not interested in democracy. He said the country could not move ahead with empowering the provincial government while ignoring the local government. He suggested that the provincial financial commission should not be limited to only the chief minister, minister and top bureaucrats and chairmen and metropolitan mayors should be represented in it.
Mary James Gill, a former MPA, said the religious minorities should have a representation in the LG, saying that the minorities should be given basic rights before political rights. She demanded that the minorities living in katchi abadis should be allowed to choose their representatives as their representatives in assemblies also were not their real representatives.
Hamza Ijaz also spoke.
Published in Dawn, March 13th, 2023