Idea behind tax amnesty schemes questionable
Islamabad: The idea behind tax amnesty schemes to unearth huge amounts of undeclared money has become controversial, questionable and useless as it is not adding significantly to government coffers but on the contrary it is encouraging big-time tax evaders and their helpers, said Pakistan Economy Watch (PEW) on Friday in a press release.
Schemes aimed at retrieving the lost revenue exempts offenders from punishment and help those who assist the wealthy who hide their taxable income, said Dr. Murtaza Mughal, President PEW.
The schemes are flawed on several counts and raises serious questions as far as moral and social aspects are concerned, he said. Such schemes offer incentive to individuals and companies to keep money undeclared and have almost no impact on black economy; he said adding that policy makers should not ignore its dangerous effects on moral fabric of the society.
Such schemes may give short-lived boost to our ailing economy but will not help to curb corruption and tax evasion, said Dr. Murtaza Mughal.
He said influential people generate around $15 billion black money every year while the undeclared cash is estimated to be around $200 billion which can resolve many problems we are facing if governance is improved.
Offering incentives for declaring undisclosed income are not a solution; it sends a message that government is ready to condone tax evaders and will pursue honest tax payers, he said.
Media and civil society have been raising voice against corruption but inaction by the government amounts to sponsoring corruption, he also said.
Dr. Mughal urged honest politicians and civil society to push the government to sign a deal with Swiss government to recover the lost revenue and stolen funds. Putting the critical issue of rampant corruption on the backburner will continue to weaken the country, he warned.