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Roving Periscope: Dubai shows why Pakistan is near-bankrupt

Roving Periscope: Dubai shows why Pakistan is near-bankrupt

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Virendra Pandit

New Delhi: Nearly 17,165 Pakistanis, who fleeced their nation for decades and now own properties of over USD 12.5 billion in Dubai alone, can still rescue their nearly bankrupt country from its current financial morass if they demonstrate their patriotism, sell off their assets, and funnel that ill-gotten money back into the South Asian country.

These Pakistanis include former army officials, bureaucrats, and politicians.

Contrast this with India. In 2016, when Prime Minister Narendra Modi launched a campaign, “Give It Up,” appealing to those who can afford it to give up their cooking gas subsidy, so more among the poor could benefit, over one crore people came forward and responded positively.

Will Pakistanis also respond similarly?

This question now rankles many inside and outside Pakistan whose total debt has mounted to over USD 125 billion now. Every month, Islamabad is seen running with a begging bowl from one nation to another to get fresh loans or reschedule old ones.

This is when its prosperous nationals own between 17,000 and 22,000 properties worth USD 12.5 billion in Dubai alone, the leaked data used by an international consortium of journalists to access details of properties in the UAE city show, the media reported.

According to Dawn.com, the leaked data provides a detailed overview of hundreds of thousands of properties in Dubai and information about their ownership or usage, largely from 2020 and 2022. It was obtained by the Centre for Advanced Defence Studies (C4ADS), a non-profit organization based in Washington, D.C., that researches international crime and conflict.

The data was then shared with Norwegian financial outlet E24 and the Organised Crime and Corruption Reporting Project (OCCRP), which coordinated an investigative project with media outlets from around the world. Titled ‘Dubai Unlocked’, the collaboration includes 74 partners from 58 countries.

The website reported that the details of “an astounding volume of leaked property data that includes over 17,000 properties listed as belonging to Pakistani nationals up to the spring of 2022” were known to journalists from scores of media outlets.

While 17,000 Pakistani citizens are listed owners in the 2022 leak, academics using the data and additional sources put the actual number of Pakistani owners of residential property in Dubai at 22,000 or more, the reports said this week.

Apartments and villas may have been worth more than USD 10 billion at the start of 2022, but with the more than 25 percent increase in property prices over the last two years, the real worth of Pakistanis’ residential properties in Dubai could now be well above USD 12.5 billion.

“If we have the data you are talking about, as well as the information on residence status, we will make sure those who are eligible to pay tax in Pakistan on rental income or capital value are doing so,” Malik Amjed Zubair Tiwana, Chairman of the Federal Board of Revenue (FBR), was quoted as saying.

“It may be a sensitive matter, and perhaps the law will have to change, but with political will, we will go all out against tax evaders. The government is prepared for this.”

He said that “citizenship has no importance in tax law” as taxation is linked to residence status. “We have been trying to get information from the immigration department of Dubai to determine tax status, but it has not materialized.”

Ali Rahim, a tax lawyer, and former chief of the Karachi Tax Bar Association, said that the entire world income of resident Pakistanis is liable to be taxed in Pakistan, but they can get credit against their total tax payment for any taxes paid abroad.

Pakistani residents (those in the country for more than 183 days per year) with assets abroad have to value them at the current exchange rate and pay a one percent tax on that if the value of the asset is more than PKR 100 million. This law is being challenged in the high courts and the Supreme Court.

Non-resident or overseas Pakistanis are only liable to pay income tax generated in Pakistan. They are not required to file a wealth statement or declare overseas assets.

Dawn also clarified that a mere mention of someone in the data is not evidence in itself of financial crime or tax fraud. Nor does the data contain information such as residence status, sources of income, tax declarations of rental income, or capital gains. Several of those approached for comment on their properties said they were declared to the tax authorities.

“But it does paint an astonishing picture of contrasts. Pakistan, a developing country teetering on the edge of economic collapse, begging international lenders and friendly countries for lifelines in single digit billions, features prominently in the data,” the website lamented.


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