Islamabad: Amid the inability of the FBR to bring the top one per cent of those who possess 22 per cent country’s capital fully into the tax net, the much-hyped FBR-established Anti-Benami Initiative (ABI) and the Benami Adjudicating Authority (BAA) stand paralyzed, being unable to apprehend potential tax dodgers.
All those who own multibillions of rupees in otherwise unexplained assets have cleverly parked their wealth and investments in the name of others but successfully managed to remain untouched despite the enactment of the Benami Law in 2017, establishment of the Anti-Benami Initiative (ABI) and activation of the Benami Adjudicating Authority since 2019. In some instances, this law has been used as a tool for political victimization. After its inception from July 2019 to December 2020, the Benami Adjudicating Authority performed well but later proved a non-starter for making any difference.
The veracity of the misuse of Benami could be gauged from the fact that with a Gini-Coefficient of 0.3, the top 1% of the population holds almost 22% of total wealth, the bottom 50% only 4%, and around 40% of the population live below the poverty line. Who has the propensity to pay, and who is not delivering? Are these 1% paying their share of personal income tax as per their income? How do they hide their transactions? By undervaluation and parking assets and transacting through Benami accounts, the comparison of account holders vis-a-vis the return filers shows a considerable gap, and the volume of these transactions indicates the vast potential of the Benami law. Commercial banks are the biggest hurdle in connecting the two databases.
