Suggestions to recover Pakistani wealth stashed abroad..!

Subject:-Suggestions to recover Pakistani wealth stashed abroad

Dear Mr. Imran Khan Sahab.

AoA.

Sir,

This in continuation of our trailing emails of 29 August 2018 on the subject mentioned above.

We can bring savings of expatriate Pakistanis back to provide them dollar denominated saving instruments; perhaps bearer in nature, or no questions asked.

Say our current euro bonds are junk rated and trading at a discount rate of 8% or more, but not accessible to local populace or retail customers abroad; mostly institutional.

Just give a local bond at 5% to any and everyone interested, which is far more than any such rates in the world, hence, you glean in pakistani money from our diaspora, as well as, locals.

The caveat is no questioned asked to the source of money.

Best Regards,

Hamesh Khan S. Nayyar Uddin

Dated 29 August 2018
Dear Mr. Imran Khan,

AoA.

Sir,

Please refer to our trailing email dated 29 August 2018 on the subject mentioned above.

In this connection, Mr. Hamesh Khan and myself would like to further add the following:

The main difference between our proposed amnesty scheme and the recently floated amnesty scheme which expired on 31 July 2018 (wherein it was not mandatory to bring the foreign Pakistani wealth into Pakistan) is that we have proposed that any relief of whitening the Pakistani wealth stashed abroad, with payment of tax equal to the 2 to 10% of the total amount, will only be permitted, if, that total amount is transferred back to Pakistan.

The bigger impact of our proposed amnesty scheme relates to physical repatriation of funds stashed abroad to Pakistan, which will reflect as investment into the economy.

Tax regime of 2 to 10% will be a pittance compared with physical fusion of money.

In many a recessionary time, pumping money by the central bank is the panacea of all economic woes.

Investment and resultant Productivity invariably spurs Economic Growth.
Investment is a central factor in determining the gross domestic product, which is the aggregate measure of a country’s economic output.

As societies invest more, they increase their capacity to produce more goods and services at lower costs, meaning greater productivity and economic growth.

Investment, in short, drives increases in productivity and growth.
Economists define investment as spending on inventories, structures and capital, defined as equipment used for producing goods and services.

Investment fuels rises in productivity.
Because investment is a component of GDP, increasing investment can fuel economic growth as measured by annual increases in GDP.

Investment and economic growth rate data for various countries over a period of time, gives a very good insight on economic growth.

Countries with higher rates of investment, such as Japan, South Korea and Singapore, had the highest economic growth rates for extended periods on account of higher investments. These indicate a positive correlation between investment and economic growth.

Hence bringing back money tantamount to savings that gets infused into economy for larger growth.

Best Regards,

Syed Nayyar Uddin Ahmad
03219402157
Lahore.

Sent from my iPhone 7

On 29-Aug-2018, at 12:13 AM, Syed Nayyar Uddin Ahmad wrote:

Dear Mr. Imran Khan,

AoA.

Sir,

This has reference to the following titled news item published by the daily “Express Tribune” of 28 August 2018.

PM seeks suggestions to recover wealth stashed abroad:

Link:-https://tribune.com.pk/story/1789207/1-pm-seeks-suggestions-recover-wealth-stashed-abroad/

The above news item explains the following challenges which may be faced by your Task Force:

– Review of all cases of unlawfully acquired assets pending before the government departments and organisations.

– Review the existing mechanism, international agreements, coordination of government of Pakistan with sovereign governments.

– Work out modalities to fast track recovery of undeclared offshore assets.

– Only legal way to get back the offshore assets was to use the Mutual Legal Assistance (MLA) framework.

– Pakistan has not signed legally binding MLA treaties with key jurisdictions like the United States, the United Kingdom, Canada, the United Arab Emirate and Malaysia.

– There was also lack of enabling domestic MLA law, which will become an obstacle in retrieval of assets.

– There is lack of robust interagency coordination.

– Another challenge that Pakistan will face is that it will have to establish that these were bona fide cases of recovery of assets and these were not politically motivated cases.

– Pakistan will also have to first lodge criminal cases against such individuals in local courts.

In view of the foregoing, there remains no doubt that the job of the Task Force set up to recover unlawfully acquired foreign assets is such that it will involve years of efforts to achieve any success.

As such, it is suggested that a plan B as detailed below, may be simultaneously launched to bring back foreign wealth of Pakistanis by an incentive scheme on the lines of the Indonesian model, which helped Indonesia bring back $366 billion.

In this regard, please note that under the last/latest offshore and domestic tax amnesty scheme, about 5,300 Pakistanis availed the offshore scheme and declared over $8 billion assets. But the repatriation to Pakistan remained less than $70 million.

The below mentioned suggestion is based for an estimated recovery of around 150 billion USD that too without involving any legal or administrative expenses spread over a large period of time.

PROPOSED SCHEME

Bringing back wealth has to be a collaborative process and will not yield results otherwise.

Indonesia which has a similar tax to GDP ratio as ours was able to repatriate US$366 billion through a voluntary amnesty scheme.

The main peg of the scheme was caveat of “no questions asked”.

It was a year long scheme with a varying tax rate of 2 to 10 percent.

Raising revenues through taxation is simply one aspect of revenue raising; the DECLARED MONEY VELOCITY is what spurs the economic expansion with sustainable results.

Policy makers can directly increase revenues by increasing tax rates on the rich, reducing tax breaks, expanding tax base, improving enforcement and levying new progressive tax.

Indirectly increase revenues through policies that increase economic activity, income and wealth.

One key overlooked aspect is fiscal responsibility through spending cuts, belt tightening on establishment cost across the board; but all of the aforementioned can only be achieved through a shared sacrifice psyche of the nation.

Among others, We need to work on savings and investments.

Policies that increase the number of people in work force, number of hours they work, skills, physical and intellectual capital.

Improving economy isn’t an insurmountable challenge, but the political will to push through, with less popular decisions, will test the leadership.

Co-authored by:

Hamesh Khan

Syed Nayyar Uddin Ahmad

Best Regards,

Syed Nayyar Uddin Ahmad
03219402157
Lahore.

Sent from my iPhone 7