Pakistan: Economy Under Elites – Tax Amnesty Scheme, 2019

ABSTRACT

The Tax Amnesty Scheme, 2019 (TAS 2019), needs to be read as a sequel to the Tax Amnesty Schemes, 2018 (TAS 2018), and so does this article. This article draws significantly on “Pakistan: Economy Under Elites—Tax Amnesty Schemes, 2018” – in the title, analytical framework, and even the thrust of the argument. Unlike TAS 2018, which was triggered by the impending bulk inflows of offshore bank account information under the Organisation for Economic Cooperation & Development (OECD)—Common Reporting Standard (CRS) framework, the TAS 2019 was prompted by the operationalisation of the Benami Transactions (Prohibition) Act, 2017, via framing of the Benami Transactions (Prohibition) Rules, 2019. The granting of the TAS 2019 during the PTI government’s prime years despite its public opposition to 2018 was evidence of an unbearable amount of pressure that Elites Ltd can exact on ruling coalitions in Pakistan, and successfully. Below-par par outcomes vindicate the existing knowledge on the subject that compliance to tax laws, or any laws, is a function of the state. The analysis in the paper, directly and indirectly, leads one to conclude that economy continues to be under the brute shackles of Pakistani elites who can fiddle with policy at will to the ultimate chagrin of the tax administration, society, and the state. The article predicts that the perverse policy choice of tax amnestisation is set to continue in the future.