Black Economy killing the Documented Economy of Pakistan

By Yousuf Ibnul Hasan

General Pervez Musharraf had given the opportunity to the Pakistan media community in establishing their Television Channels under their non-repetition investment or from their own financial resources, and arrangement. This had opened a large dam of black money as an investment in the Media Channels and illegal import of equipment which was seen flooded in the local market. Pakistan electronic market key players had opened their representative offices in Singapore and Hong Kong, which offered them the facility to pay upon payment received. It is strange to note that remittances of payment were made through Hawala which was beyond any control of of Pakistan. The media house investors had the financial means and the sources which were largely in the form of black funds, hidden funds and holding funds in trillions that too have no control of of Pakistan or FBR.

With all such liberty that the black marketers got from the closed eyes of the government, the Governor State Bank of Pakistan introduces Rs5,000 denomination notes with addition issuance of Prize Bond of Rs 40,000 unregistered that made the large volume of currency and bonds stored at a small hidden space. It encourages the travel of an individual who easily carried Rs. 2 million worth of currency in the pocket and worth of Rs 4 million unregistered Bonds in a briefcase. The Airport authorities close their eyes on such currency smuggling activities at a return of 1% of the total volume of currency and bonds to fly abroad. The Dubai market is the heaven of Pak Currency and the main buyers are Indian Money Changers who buy Pak Rupees which was largely bought by CIA, Mossad, RAW and Afghan warlords for their purpose to disturb Pakistan security.

It is evident that the large funds which were placed in Dubai and Hong Kong were owned by Pakistan Politicians and Civil Servants and for the purpose Off-Shore Accounts that have no cheque book facility is the best storage which is operated with just four pin code or right thumb impression. Some of the agents who deal in escrow services are the operators of such account, which mean the funds do not have the name of the owner but it is placed with lawyers who charge their fee from the profit that is earned in their bank account which belongs to Pakistan depositor.       

With all the black sources that were active since 2000 taken a turn towards safe trade and investment when the then information minister Sheikh Rasheed Ahmed open the permission to introduce parallel electronic media with state-owned media the Pakistan Television Corporation and Pakistan Broadcasting Corporation, the Radio Pakistan. As a result, a large number of jobs created and the media activity become the media industry with all the evils, devils and corruption in money matters. The gutter journalism develops and proofreaders become the anchors. The media owners started the media power through such so-called journalist to acquire the operating capital from malpractice and professional corruption.                     

Pakistan media industry from 2001 to 2012 seen high in volume of illegal import of the audio and video equipment and trillion of rupee worth of Audio and Video machinery which was installed in media channels is proven as acquired from stolen duty and taxes purchases. The media houses with fear of declaration of financial means to PEMERA used local third party for such purchases and the third party brought this machinery without duty payment either from Karachi Ports or through dry ports. Pakistan Custom had made billions of rupees in such illegal trade and reliable sources investigated and identify the trillion of rupees scams in the media industry.

Today 98% of private media houses are broadcasting the programs with only one agenda, what is corruption? Who is involved in corruption? This is to take their share in the black money to have the operative capital for their institution.

The question arises that how multi million worth of programs are produced in the most expensive markets and where the funds are coming from to meet such high expenses. The problems of people are set aside and Channel Rating becomes the motive of the media operation. On the other side of the game, the illegal importer of the media equipment and instrument are so powerful that they cannot be touched as they were the partner of the media houses and using the influence on Customs and Customs intelligence to keep the eye close on such activities. Customs officials are having their share and assuming fearless jobs that they can be removed from the seat. In addition, they are invited to the glimmer of the industry with the fun of wine; women and money which they get pleasure from. The banks are quite to such trade because the State Bank of Pakistan is remaining on honeymoon. The printing of currency and high yield foreign debts are creating the burden on the common taxpayer and the media, civil servants, bankers and smugglers are portraying themselves as “Rome is burning and Nero playing the flute”. General Pervez Musharraf and Mr Sheikh Rasheed had taken a decision without considering future economic difficulties and losses to pleased few, damage the norms and ethics of the entire nation and in the name of FREE PRESS.

Dr Isharat Hussain and Dr Shamshad Akhter were the two governors of State Bank of Pakistan who are accounted for the dilemma in which the forced liquidation of the prestigious banking institution, namely, the NDFC, Bankers Equity, Indus Bank Limited and Franklin Bank Limited and among these institution the Indus Bank Limited was 92% liquid at the time of cancelling the banking licence and it was one of the safest bank in its banking size, which was push into force liquidation by the then governor Dr Isharat Hussain under malaise and in personal vendetta with the bank's Chairman Kursheed Sohail and Bankers Equity and NDFC due to its nonperforming loans which were largely taken or given on the recommendation by the political power of Pakistan, ignoring the high value status DFIs . Dr Shamshad Akhter after taking the office from Dr Isharat Hussain never bother to look into the affairs of the three institutions and started in the designing of currency notes and introduce Rs5000 note. Thanks to the maturity of her tenure which she competed without completing her plans to introduce a note of Rs25,000.

What is mention above has only a few facts that are explained and it is important that the media houses and State Bank of Pakistan must be taken under under Francis Audit by an audit firm which does not take influence in declaring the truth and actual culprits?

On the other side, all large denomination notes must be pulled back into national treasury as cancel currency from the market circulation and new note of Rs100 to be introduced as the largest denomination note in circulation. The large volume of currency holder should be given 100% amnesty to deposit the hidden wealth without fear and action in the banks with the condition that the withdrawals shall be maximum Rs25,000 per transaction tax-free and over and above to the limit of Rs500,000 at WT 0.05%. The amount of wealth kept in the banking account remains exempted from the income tax; whereas non-business accounts above to Rs10 million shall be subject to Wealth Tax of 3% annul. The black money brought to the bank cannot be replaced with any kind of currency and in any other form except to be kept with the bank and bank should not accept foreign currency deposit in cash to an equal value of Rs 500,000. However, any remittance that appears at the swift message as the banking remittance from authorizing banking institution should not be subject to question. But remittance over to Rs.1 million in foreign currency to be permitted by the commercial banks upon satisfaction reason of remittance and on support documentary evidence.    

Credit Cards should be discouraging and Debit Cards to be encouraging without any charges or fee. The balance in Term Deposit, Fixed Deposit, Profit and Loss account or in Current Account should be exempted from any kind of taxes on profit declared by the bank and bank should be declared the profit on a monthly basis by clearly declaring the profit result are without obligation. This will promote the high liquidity that decreases the cost of funds which also decrease the cost of the product and increase the affordability which increases the procurement, production, supply and consumption which need the industrialization and job that decrease the crime in the society.

All import and export should be routed and all duty and taxes on import and refund of of duty drawback should the the responsibility of facilitating bank which the bank ensure the custom duty while releasing the import documents and get the refund from the State Bank of Pakistan upon receiving the export proceeds. This will further curb the malpractices of Customs and Tax authorities.

The restriction to the denomination of currency will develop a documented economy which is the contemporary need to overpower financial and economic crises of Pakistan. this the time to realize that the system running at the level of SBP, FBR, Banking Industry, Money Changers, Customs and Regulatory authorities is effected with termites which have to be treated with the drastic measure and in these measures cash circulation should be converted into documented currency which do not have any kind of cash involvement. It is expected that if targets are fixed to the tax collectors and assessment through digitize programs the blackmailing of black economy will be burred to known destination which is accountability at lower to upper and not upper to lower. It is proven that when there is a will there is a way. Allah help those who help themselves. (p[email protected])