New PM & reforms agenda

Huzaima Bukhari, Dr. Ikramul Haq & Abdul Rauf Shakoori

Pakistan needs all out fundamental structural reforms in all areas of governance. However, the most important and immediate is political stability—the main challenge faced by the 23rd Prime Minister of Pakistan, Mian Muhammad Shehbaz Sharif. Before taking oath, after elected with 174 votes of members of National Assembly, he made a number of pledges, reported amongst others by Associated Press of Pakistan. These measures were more in the nature of fire-fighting than fundamental structural reforms. In this article, an attempt is made to highlight some key areas requiring immediate attention.

?The best way to bring about transparency in public finance and uproot financial crimes is establishment of a central anti-crime agency as highlighted in Uprooting corruption: Lessons from China, Global Village Space, May 12, 2021. Political parties must get rid of tax evaders and those living beyond means in their ranks and files. Parties should also get rid of cultism—one man controlling the entire party. Once elected as the Prime Minister he/she should not head the party. So far no political party is adhering to the basic norm of democracy that is separation of party control and running state affairs. The party should make the government accountable.

In utter violation of the Constitution, no party is holding elections as elsewhere in the world where bona fide democracy exists. This is the main area where we need to focus before talking of economic revival. Authoritarianism is apparent in our political culture. No one should be indispensible. Individuals come and go—what matters is welfare of masses, effective functioning of institutions and enforcement of rule of law. Democratisation of political parties, accountability of all and supremacy of the Constitution alone can strengthen democracy—this is also necessary to check external institutional influence and control of party by those having money power. It is time to reform all institutions and ensure economic progress of Pakistan for which a detailed roadmap is given in Friend for all seasons, Narratives, May 8, 2021 explaining what we can learn from our most trusted friend China while celebrating 70 years of cherished relations and the importance of China-Pakistan Economic Corridor (CPEC) and?Belt?and?Road Initiative?(BRI).

?The recent article by Shakeel Ahmad Ramay, Fixing the economy and CPEC, The News, April 11, 2022, gives many pragmatic solutions for fixing the economy as well as CPEC and the following paragraph is worth quoting:

?“In the conclusion, ruling elite, new government and parties will have to work on four areas, which is pre-requisite to make the CPEC cooperation a success. First, the ruling elite will have to put the house in order and political elite will have to come of out mentality of self-greatness. Second, government will have to devise SEZs policy and cooperate agriculture policy immediately. Third, there should be no political games or point scoring to present itself champion of China-Pakistan brotherhood. As China does not care about parties or individuals, China only cares about State of Pakistan and People of Pakistan. Especially PMLN and PPPP will have to learn this and they must avoid self-projection on this front”.

?The salient points for consideration of all political parties and national debate to evolve National Reforms Agenda, beyond party affiliations, before next elections can be:

?1.????Creating new province—South Punjab Province—for which constitutional amendment bill is already lying in National Assembly, filed on March 24, 2022.?

2.????Making Karachi federal territory to ensure that it gets due funds and best administration.

3.????Carrying out fundamental reforms in the justice system and in administrative/governance apparatuses to eliminate the causes of litigation. Ensuring efficacy and accountability of all institutions.?

4.????Revamping of education system to end ignorance and illiteracy, and make people skilful rather than distributing paper degrees and diplomas. Focal point of education should be creating a society that is tolerant, disciplined, courteous and knowledgeable—capable of making innovations and technological advances.

5.????Holding direct elections of Senate and giving it powers to vote on Money Bill.

6.????Decentralising political, administrative and financial responsibility to local governments. Education, health, housing, local policing, and all civil amenities should be provided through elected representatives of the local governments that should have powers to raise taxes for these purposes.

7.????Digitizing, enforcing transparency and accountability in the governments at all levels to enable citizens to understand and participating fully in the process of national integration.

8.????Reforming civil services, ensuring fair deal for employees with effective and across the board accountability.

9.????Eliminating terrorism, sectarianism, bigotry, intolerance and violence through enforcement of law and by taking concrete measures to ensure social development of society based on higher values of life and humanity.

10.?Implementing strict laws to curb terrorist financing, money laundering, plundering of national wealth, political write off of loans and leakages in revenue collections.

11.?Devising long-term and short-term strategies to break the shackles of debt-trap, making Pakistan a self-reliant economy and ensuring social security and economic justice for all citizens.

12. Reforming and strengthening of management of public finances. Transparent public sector spending coupled with efficient performance.

13. Controlling wasteful, non-developmental expenditure.

14. Reforming of technical, institutional and organizational dimensions of public finance.

15. Ensuring good governance and corruption free administrative and judicial structures.

16.?Federal government should only collect income tax and customs duty. Harmonised sales tax on goods and services should be in the provincial domain. All federal, provincial and local taxes should be collected through one agency (National Tax Authority) which should also disburse pensions and other social security payments to all citizens.

17. Reducing excessive marginal tax rates making them compatible with other tax jurisdictions of the world, especially in Asia.?Substantially reducing corporate rate of tax. Eliminating onerous taxes and other regulations for corporate sector that are main stumbling blocks for domestic and foreign investments. Simplifying tax laws and procedures.

Dr. Nadeem Ul Haque, Vice Chancellor of PIDE, in How Pakistan Became an?Asian Tiger?by 2050 has offered an optimistic, futuristic and realistic perspective for a prosperous Pakistan. Unfortunately, this work has yet not been given the attention it deserves by policymakers, legislators, academicians, businessmen and administrators. Our politicians, administrators, intelligentsia and entrepreneurs keep on complaining about multiple and complex challenges faced by Pakistan but seldom strive to implement even the available and workable solutions by local experts. We want IMF, World Bank and others to reform us. This is our real tragedy and dilemma.

We must appreciate and implement the indigenous research-based solutions after debate in public and in national and provincial assemblies and Senate. The Standing and Special Committees should invite (through virtual platforms if needed) experts for assisting and there should be live telecast so that public learns the process of legislation for beneficial reforms.

Originally published in the Business Recorder on April 15, 2022 without retaining the references. The link is:

https://www.brecorder.com/news/40167395/new-pm-and-reforms-agenda

_________________________________________

Ms. Huzaima Bukhari, MA, LLB, Advocate High Court, Visiting Faculty at Lahore University of Management Sciences (LUMS), member Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE), is author of numerous books and articles on Pakistani tax laws. She is editor of Taxation and partner in Huzaima & Ikram, and Huzaima, Ikram & Ijaz, leading law firms of Pakistan. From 1984 to 2003, she was associated with Civil Services of Pakistan. Since 1987, she has been teaching tax laws at various institutions including government-run training institutes in Lahore. She specialises in the areas of international tax laws, ML/CFT related laws, corporate and commercial laws. She is co-author and review editor for many publications of International Bureau of Fiscal Documentation (IBFD).

She has coauthored with Dr. Ikramul Haq many books that include ?Tax Reforms in Pakistan: Historic & Critical Review, Towards Flat, Low-rate, Broad and Predictable Taxes (revised & Expanded Edition, Pakistan: Enigma of Taxation, Towards Flat, Low-rate, Broad and Predictable Taxes (revised/enlarged edition of December 2020), Law & Practice of Income Tax, Law , Practice of Sales Tax, Law and Practice of Corporate Law, Law & Practice of Federal Excise, Law & Practice of Sales Tax on Services, Federal Tax Laws of Pakistan, Provincial Tax Laws, Practical Handbook of Income Tax, Tax Laws of Pakistan, Principles of Income Tax with Glossary and Master Tax Guide, Income Tax Digest 1886-2011 (with judicial analysis).

The recent publication, coauthored with Abdul Rauf Shakoori and Dr. Ikramul Haq, is Pakistan Tackling FATF: Challenges & Solutions

available at:?https://www.amazon.com/dp/B08RXH8W46?and https://aacp.com.pk/

She regularly writes columns/articles/papers for Pakistani newspapers/journals and international journals/magazines and has contributed over 1740 articles on issues of public finance, taxation, economy and on various social issues in various journals, magazines and newspapers at home and abroad.

Twitter:?@Huzaimabukhari

__________________________________________

Dr. Ikramul Haq, Advocate Supreme Court, specialises in constitutional, corporate, media and cyber laws, ML/CFT related laws, IT, intellectual property, arbitration and international tax laws. He established Huzaima & Ikram in 1996 and is presently its chief partner as well as partner in Huzaima Ikram & Ijaz. He studied journalism, English literature and law. He is Chief Editor of Taxation.?He is country editor and correspondent of International Bureau of Fiscal Documentation (IBFD) and member of International Fiscal Association (IFA). He is Visiting Faculty at Lahore University of Management Sciences (LUMS) and member Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE).

?He has coauthored with Huzaima Bukhari many books that include Tax Reforms in Pakistan: Historic & Critical Review, Towards Flat, Low-rate, Broad and Predictable Taxes (revised & Expanded Edition, ?Pakistan: Enigma of Taxation, Towards Flat, Low-rate, Broad and Predictable Taxes (revised/enlarged edition of December 2020), Law & Practice of Income Tax, Law , Practice of Sales Tax, Law and Practice of Corporate Law, Law & Practice of Federal Excise, Law & Practice of Sales Tax on Services, Federal Tax Laws of Pakistan, Provincial Tax Laws, Practical Handbook of Income Tax, Tax Laws of Pakistan, Principles of Income Tax with Glossary and Master Tax Guide, Income Tax Digest 1886-2011 (with judicial analysis).

?The recent publication, coauthored with Abdul Rauf Shakoori and Huzaima Bukhari is Pakistan Tackling FATF: Challenges & Solutions

available at:?https://www.amazon.com/dp/B08RXH8W46?and https://accp.com.pk/

?He is author of Commentary on Avoidance of Double Taxation Agreements signed by Pakistan, Pakistan: From Hash to Heroin, its sequel Pakistan: Drug-trap to Debt-trap and Practical Handbook of Income Tax.

?He regularly writes columns/article/papers for many Pakistani newspapers and international journals and has contributed over 2500 articles on a variety of issues of public interest, printed in various journals, magazines and newspapers at home and abroad.

Twitter: DrIkramulHaq

________________________________

Abdul Rauf Shakoori, Advocate High Court, is a subject-matter expert on AML-CFT, Compliance, Cyber Crime and Risk Management. He has been providing AML-CFT advisory and training services to financial institutions (banks, DNFBPs, Investment companies, Money Service Businesses, insurance companies and securities), government institutions including law enforcement agencies located in North America (USA & CANADA), Middle East and Pakistan. His areas of expertise include legal, strategic planning, cross border transactions including but not limited to joint ventures (JVs), mergers & acquisitions (M&A), takeovers, privatizations, overseas expansions, USA Patriot Act, Banking Secrecy Act, Office of Foreign Assets Control (OFAC).

?Over his career he has demonstrated excellent leadership, communication, analytical, and problem-solving skills and have also developed and delivered training courses in the areas of AML/CFT, Compliance, Fraud & Financial Crime Risk Management, Bank Secrecy, Cyber Crimes & Internet Threats against Banks, E–Channels Fraud Prevention, Security and Investigation of Financial Crimes. The courses have been delivered as practical workshops with case study driven scenarios and exams to insure knowledge transfer.

?His notable publications are; Rauf’s Compilation of Corporate Laws of Pakistan, Rauf’s Company Law and Practice of Pakistan, Rauf’s Research on Labour Laws and Income Tax and others.

?His articles include: Revenue collection: Contemporary targets vs. orthodox approach, It is time to say goodbye to our past, US double standards. Was Due Process Flouted While Convicting Nawaz Sharif?, FATF and unjustly grey listed Pakistan, Corruption is no excuse for Incompetence, Next step for Pakistan, Pakistan’s compliance with FATF mandates, a work in progress, Pakistan’s strategy to address FATF Mandates was Inadequate, Pakistan’s Evolving FATF Compliance, Transparency Curtails Corruption, Pakistan’s Long Road towards FATF Compliance, Pakistan’s Archaic Approach to Addressing FATF Mandates, FATF: Challenges for June deadline, Pakistan: Combating the illicit flow of money, Regulating Crypto: An uphill task for Pakistan. Pakistan’s economy – Chicanery of numbers. Pakistan: Reclaiming its space on FATF whitelist. Sacred Games: Kulbhushan Jadhav Case. National FATF secretariat and Financial Monitoring Unit. The FATF challenge. Pakistan: Crucial FATF hearing. Pakistan: Dissecting FATF Failure, Environmental crimes: An emerging challenge, Countering corrupt practices .

The recent book, coauthored with Huzaima Bukhari & Dr. Ikramul Haq is Pakistan Tackling FATF: Challenges & Solutions , available at:?https://www.amazon.com/dp/B08RXH8W46?and https://aacp.com.pk/

?

?

?