Pakistan is ruled and controlled by predatory elites in whose hands power and wealth are concentrated. This has been proved in the recent election of 54 members of Senate where allegedly huge funds exchanged hands! The ruling elites – comprising indomitable militro-judicial-complex, unscrupulous politicians, absentee landowners and greedy traders – are engaged in loot and plunder, rent-seeking and snatching of public property. Their lust for more and more control is giving rise to perpetual confrontations risking the very survival of the State.
Our elites suffer from many maladies such as self-righteousness, self-praise, phobias of all kinds, especially losing of power and money, and despair arising out of affluence. These classes are captives of their own self-interests and victims of perpetual self-aggrandisement. The latest manifestation surfaced on March 7, 2018 when the Cabinet increased the daily allowance of all the parliamentarians by 71%, equal to the officers in grade 22 since July 3, 2017. Earlier, such a move came to the notice of public when the Supreme Court on April 17, 2013 suspended the March 14, 2013 notification issued by the then Interior Minister giving him and all his predecessors lifetime perks and privileges. Hearing the suo motu notice case regarding the unlimited perks and privileges granted to two former prime ministers, all former interior ministers, Sindh chief minister and other senior officials by the outgoing government, the five-member bench headed by the then Chief Justice, Iftikhar Muhammad Chaudhry, sought a response from relevant authorities. What happened thereafter is not known – whether any final order was passed or not is not made public.
The following are some examples of worst rapacious activities of predatory elites that are not debated in the media:
Grabbing state lands
The high-ranking military and civil officials, judges and holders of public office do not pay a single penny as tax on plots they receive free of charge or at concessional rates from the state though section 13(11) and 39(1)(j) of the Income Tax Ordinance, 2001 so requires. This is a gross violation of law of the land. Section 13(11) of the Income Tax Ordinance, 2001 applies in the case of employees (military or civil) says:
“Where, in a tax year, property is transferred or services are provided by an employer to an employee, the amount chargeable to tax to the employee under the head “Salary” for that year shall include the fair market value of the property or services determined at the time the property is transferred or the services are provided, as reduced by any payment made by the employee for the property or services”.
Section 39(1)(j) of the Income Tax Ordinance, 2001 is attracted in the case of persons other than state employees, it declares the following as income chargeable to tax:
“The fair market value of any benefit, whether convertible to money or not, received in connection with the provision, use or exploitation of property”.
Section 14(b) of the Income Tax Ordinance, 2001 defines “services” to include the provision of any facility” and the concept of “fair market” is defined in section 68 as under:
“68. Fair market value.- (1) For the purposes of this Ordinance, the fair market value of any property or rent, asset, service, benefit or perquisite at a particular time shall be the price which the property or rent, asset, service, benefit or perquisite would ordinarily fetch on sale or supply in the open market at that time.
(2) The fair market value of any property or rent, asset, service, benefit or perquisite shall be determined without regard to any restriction on transfer or to the fact that it is not otherwise convertible to cash.
(3) Where the price referred to in sub-section (1) is not ordinarily ascertainable, such price may be determined by the Commissioner”.
A former Member of FBR in a letter to ex-Finance Minister, Abdul Hafeez Shaikh, pointed out that colossal revenue loss incurred due to non-taxation of benefits given to public office holders, the high-ranking civil and military officials, politicians and their cronies as free or at a concessional rate as FBR did not invoke section 13(11) and 39(1)(j) of the Income Tax Ordinance, 2001. As expected, the finance minister and FBR conveniently ignored the letter. FBR never bothered to recover tax from the beneficiaries. In Pakistan, privileged classes want to tax the weaker sections of society (exorbitant sales tax on many items consumed by the poor), but not ready to pay taxes on their incomes. Adding insult to injury, these predatory elites get unprecedented perquisites and benefits funded by taxpayers – what makes the situation more painful is the fact that no tax is even paid on these ignoring the explicit provisions of the Income Tax Ordinance, 2001 mentioned above.
Unprecedented perks and perquisites
On May 16, 2016, amid simmering tensions between the government and opposition over the Panama Papers issue, the lawmakers from both sides came together to demand a five-fold increase in their salaries and perks. The House unanimously adopted a motion to increase their salaries five times claiming that “the present remuneration is ‘meagre’ and ‘does not commensurate with our status”. The motion was presented by Chaudhry Bashir Virk, who was acting Chairman of the Standing Committee on Rules of Procedure and Privileges.
The House, otherwise divided along party lines, stood united when it came to salaries, perks and allowances. It proposed that basic salary should be increased from the current Rs 36,000 to Rs 200,000, a five and a half times increase. The salaries of National Assembly Speaker and the Senate Chairman were proposed to be increased to Rs 400,000 while the salaries of Deputy Speaker and Deputy Senate Chairman at Rs 350,000. The parliamentarians also sought an increase in their transport allowance from Rs 7,000 per day when on duty and to Rs 50,000 per month. They also wanted increase in the number of business class return tickets from 20 to 30. The parliamentarians also wanted to double their travel allowance from the current Rs 10 to Rs 20 per kilometre. The motion also asked for an increase in IT and phone allowance, introduction of monthly utility allowance to the tune of Rs 50,000 and increase in the sum allocated for maintenance of offices from the previous Rs 8,000 to Rs 100,000.
The handbook titled ‘The Members of Parliament (Salaries & Allowances) Act, 1974 & The Federal Services Medical Attendance Rules, 1990 (as modified up to August, 2016)’ gives details of salaries, allowances, perks and benefits for members of the Parliament’ including special privileges of the Leader of the House and the Leader of the Opposition in both the Houses of the Parliament. It also includes the Federal Services Medical Attendance Rules, 1990.
Huzaima Bukhari and Dr Ikramul Haq, "Elites, legislators and squanderers," Business Recorder. 2018-03-09.Keywords: Political science , Predatory elites , Perpetual confrontations , Finance Minister , Fair market , Panama Papers , Business class , FBR