Culture of immorality

Those who say Nawaz was not removed on corruption charges must read section 78(3) of Representation of People Act, 1976 that defines filing of false declaration as ‘corrupt practice’

Culture of immorality

Pakistan is a unique country where the government instead of combating corruption and tax evasion, sponsors and defends it — where the convicted and accused are given state protocol and important ministerial posts. For the last many decades, especially after passing of Protection of Economic Reforms Act of 1992, Pakistan has lost revenue of billions of rupees. This law helps tax avoidance, legitimising dirty money and flight of capital. The policies of appeasement by successive governments, civil and military alike, towards the corrupt and criminals have created a culture of immorality wherein community at large believes that there is nothing wrong in plundering of national wealth, evading taxes and defending dishonest political leaders and rapacious rulers. This is a recipe for collective destructiveness.

It is an undeniable fact that every year billions are sent abroad and then part of it, tucked up in tax havens, is whitened using section 111(4) of the Income Tax Ordinance, 2001 — a state-sponsored money laundering scheme. Now, the government in the wake of judgement against Nawaz Sharif instead of asking Federal Board of Revenue (FBR) to proceed against him for tax evasion is considering yet another amnesty scheme for those who stashed assets abroad.

According to a report, rich Pakistanis have been using Iqamas (work permits) as a tool to stash money in tax heavens and “ironically, incumbent federal ministers of ruling Pakistan Muslim League-N (PML-N) including Finance Minister Ishaq Dar, Foreign Minister Khawaja Asif and Interior Minister Ahsan Iqbal are holding Iqamas/work permits of various countries like UAE, Saudi Arabia etc”.

The ousted three-time elected premier, while addressing gatherings along his GT Road journey, openly blamed the highest court of the country of ‘conspiracy’ against him. He claimed that he did not receive any salary from son’s company, but facts speak otherwise.

From Tax Year 2008 onwards, Nawaz Sharif was resident and was liable to tax for both Pakistan and foreign source income — he was bound by law to offer for tax salary income from Capital FZE, on due or receipt basis, whichever matures earlier [section 12 read with section 69 of the Income Tax Ordinance, 2001]. He did not declare any such income in his tax returns and nomination papers filed on 31 March 2013. He also concealed the bank account maintained in UAE.

Judgement of Supreme Court disqualifying Nawaz Sharif is based on report of Joint Investigation Team (JIT) which was shown to him and he also filed reply. Those claiming that no case is proved against Nawaz Sharif should read this part of JIT report which says:

“Further, evidence thus procured reveals that Mian Nawaz Sharif, Respondent No 1, was the chairman of the board for Capital FZE from August 7, 2006 until April 20, 2014 at a salary of AED 10,000. Further, evidence revealed that this salary was revised on February 2, 2007 vide Employment Contact Amendment-Form 9, duly signed by Respondent No 1, filed with JAFZA. On the basis of this employment Respondent No 1 was able to procure ‘Iqama’ dated 5-7-2009 and valid up to 4-6-2015 to work and reside in Dubai (Annex G)”.

In its order of July 28, 2017, the Supreme Court noted that Nawaz Sharif “denied withdrawal of salary, but payment of salaries to all employees electronically, through the Wage Protection System, under Ministerial Resolution No. (788) for 2009 on Wage Protection used by United Arab Emirates Ministry of Labour and Rules 11(6) and 11(7) of the Jebel Ali Free Zone Rules, would belie his stance”. Rule 11(7) says:

A Client shall be registered in WPS and shall transfer the Employees’ salaries through the WPS to confirm that all emoluments due have been paid between the 1st and 15th of every month. A Client failing to register in the WPS, as required by Jafza, may suffer penalties. A Client is required to keep certified copies of certificates of payments - duly signed by both the Employee and the authorised signatory of the Client approved by Jafza. A Client shall have available for inspection such certified copies of the certificate of payment.

Indeed, the disqualification of Nawaz Sharif by the Supreme Court for filing false declaration is strictly in accordance with law. He may be a hero for PML-N but remains a convict under law

Owner of Capital FZE did not produce evidence in Supreme Court that it was penalised for violating the above rule by not paying salary to Nawaz Sharif. If salary was paid but not withdrawn by Nawaz Sharif, it could not escape taxability under section 12 read with section 69 the Income Tax Ordinance, 2001 and closing balance was to be declared on asset side in wealth statement and in nomination papers.

It is also worth mentioning that the deadline for implementing WPS for firms with more than 100 workers was before November 30, 2009, companies with a workforce of 15 to 99 by February 28, 2010 and companies with less than 15 workers before May 31, 2010. Companies failing to meet the said deadlines were to be denied new work permits. It evident from record that Nawaz Sharif was issued second Iqama (7104231/201/06 expiring on June 4, 2015) — earlier was issued on July 6, 2009 that expired on July 5, 2012. Had salary was not been transferred to his account, Capital FZE couldn’t have gotten second Iqama for him.

Undoubtedly, Nawaz Sharif was guilty of concealing the fact of employment with Capital FZE, tax evasion and continuing the employment even after taking oath of Prime Minister in June 2013. Those who say he was not removed on corruption charges must read section 78(3) of Representation of People Act, 1976 that defines filing of false declaration as ‘corrupt practice’. Indeed, the disqualification of Nawaz Sharif by Supreme Court for filing false declaration is strictly in accordance with law. He may be a hero for PML-N but a convict under the law.

Failure to show legitimate sources for purchase of Mayfair flats through offshore companies, establishing of huge businesses abroad, fabrication of documents, including Qatari letters, are criminal offences to be tried by the competent court for which Supreme Court has issued directions to the National Accountability Bureau (NAB) to file references within six weeks.


The writer is Advocate Supreme Court and Adjunct Faculty at Lahore University of Management Sciences (LUMS). Email:; Twitter: @drikramulhaq



Published in Daily Times, August 13th 2017.