Legislators, FBR, NAB, ECP & accountability – Dr Ikramul Haq

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Every year a large number of legislators-Senators, members of National and Provincial Assemblies-fail to file their annual statements of assets and liabilities to the Election Commission of Pakistan (ECP) in time. The ECP, under the law, just temporarily suspends their membership and after filing of the required statements belatedly, the same stands restored. However, when tax directory of parliamentarians is published, name and shame becomes popular topic in TV talk show for a few days and then it also fades away without any impact as Federal Board of Revenue (FBR), National Accountability Bureau (NAB) and ECP takes no action.

Federal Board of Revenue (FBR) released ‘Parliamentarians’ Tax Directory for Tax Year 2018′, ‘Tax Directory of all Taxpayers for Tax Year 2018’ and ‘Tax Directory Analysis for Tax Year 2018’ on September 18, 2020 after delay of over 18 months. The Tax Directory Analysis for Tax Year 2018, released for the first time since start of publishing directories for tax year 2013, presents figures of return filers and their contribution; category wise as well as on provincial, region, city and leading markets basis. It covers returns received up to September 14, 2020 for tax year 2018! What FBR did with non-filers and late-filers is not made public. In a Press report, it is alleged that among the non-filers are 45 legislators. The Income Tax Ordinance, 2001 have provisions of issuance of notice to non-filers and levying penalty and even prosecution if default is willful and deliberate but FBR made no disclosure of any such action against them.

If lawmakers become law-breakers in discharging their own legal obligations, what can be expected of ensuring rule of law in the country? In 2019, there were 495 legislators violating section 137(1) of the Elections Act, 2017 [hereinafter “the Act”] Act to file declaration by due date (December 31, 2019). This happens every year. The Act should be amended providing daily fine of Rs. 5,000 for late filing of declarations, if no bona fide reasons are provided for extension (presently no provision exists for seeking extension). In case of repeated lapse for two years, the defaulting legislator should be barred from taking part in elections for at least one term.

Many lawmakers do not submit statements of assets of their spouses and dependents. Many just write “as before”. In many cases, the value of assets is understated. The quantum of income declared by majority of legislators does not justify their standard of living. Many have not shown ownership of any vehicle, but move in motorcades! Some conceal properties/businesses at home and abroad through benami or offshore companies but NAB on the basis of definite information available with FBR takes no action across the board, rather it is selective. Confidentiality is not a bar for NAB for public office holders under any law.

People ask when would NAB proceed against those legislators or government servants, who through benamidars (name-lenders), availed Foreign Assets (Declaration and Repatriation) Act, 2018, Voluntary Declaration of Domestic Assets Act, 2018, Assets Declaration Ordinance, 2019 and Assets Declaration Act, 2019-all these ensure complete confidentiality. Such laws passed by legislators are highly lamentable. The ECP, FBR, NAB and Federal Investigation Agency (FIA), have not even coordinated to form a joint team to determine that assets whitened were not created out of proceeds of crime. The parliamentarians and state functionaries, their spouses and dependents could not even avail the above amnesties but FBR has miserably failed to show any inclination to proceed against them as Tax Directories of Parliamentarians, published for tax year 2013 to 2018 confirm that vast majority of them declared meagre incomes not matching their standard of living. Even no question was ever posed, let alone taking any action as is done in the case of ordinary citizens.

Thorough scrutiny of legislators’ declarations by any competent person can lead to the disqualification of a majority of them for making misrepresentations under oath as most of them cannot justify their assets and standard of living vis-à-vis disclosure of meagre income. Unfortunately, all agencies, NAB, FBR, ECP and FIA, have so far failed to discharge their duties, especially investigating the financial/tax affairs of legislators and state functionaries, barring a few cases.

It is worth mentioning that ECP on November 28, 2016 decided to reactivate its Political Finance Wing for the purpose of random scrutiny of the declarations of assets and liabilities of legislators. This decision came in the wake of disqualification petitions against Nawaz Sharif, his offspring and son-in-law, Federal Finance Minister, Chairman and ex-General Secretary of Pakistan Tehreek-e-Insaaf. According to a Press report, ECP started scrutinising the declarations of as many as 100 parliamentarians with effect from December 1, 2016 but the results are yet not made public even after lapse of four years. People have a right to know under Article 19A of the Constitution the outcome of probe against the 100 legislators selected for scrutiny.

Critics say that process of scrutiny by ECP in 2016 was nothing more than eyewash. There was no meaningful coordination between ECP and State Bank of Pakistan (SBP), Securities & Exchange Commission of Pakistan (SECP), FBR, NAB or FIA or any other department to cross-check the data submitted by legislators. So long heads of these institutions are serving the political masters who appoint them, there cannot be an independent and result-oriented scrutiny of declarations of the legislators. The same is true for those holding top position in judiciary, civil services and in khakis. They say they have internal check and balance system but nation has hardly seen any punitive action even after discovery of their assets beyond means.

The politicians blame powerful men in mufti and khakis but themselves repeatedly pass laws giving amnesties/immunities to tax evaders. They also provide them complete secrecy and confidentiality. Who are beneficiaries of such schemes? Who need protection behind the provisions of “confidentiality”, availing amnesty schemes? There exists an unholy alliance between the politicians and bureaucrats. Bureaucrats please their political masters and in return get favours. If elected representatives are sincere, they should pass asset-seizure legislation and confiscate all the ill-gotten money and untaxed assets. This step will not only ensure accountability of all but solve the most pressing issue of burgeoning fiscal deficit and mammoth debt burden.

It is high time that civil society demands enactment of a comprehensive law, Investigation of Declarations of State Functionaries & Public Representatives Act. It should cover judges and generals and all civil servants. Under this law, SBP, FIA, FBR, ECP and any other department or institutions should share with Independent Commission, headed by a retired Judge of Supreme Court, all declarations filed by them. The Independent Commission having experts in tax, accounting and financial matters, especially probing white collar crimes, in case of any incontrovertible proof of wrongdoing after data matching or information provided by anybody or a whistleblower, should refer the matter for action to the relevant department/authority e.g. SBP, FBR, NAB, FIA, military authorities, as the case may be, to take action under their relevant laws.

The writer, Advocate Supreme Court, is Adjunct Faculty at Lahore University of Management Sciences (LUMS)