Government to Allow Investment of Black Money in Stock Market

GOVERNMENT TO ALLOW INVESTMENT OF BLACK MONEY IN STOCK MARKET GOVERNMENT TO ALLOW INVESTMENT OF BLACK MONEY IN STOCK MARKET By Qamar-ul-Islam Advocate High Court, Karachi Question arises that why Government is to allow investment of black money in stock market only. Is it not discriminatory and favour to some unknown favourites? If there is any such move to allow investment of black money it should be allowed in all fields and no question of any sort on any investment be put whether it is black or white money. This exceptional nature of move will completely wipe out the stock markets of the country, because no one will be bringing his black money for investment in stock markets, but as the scheme itself states, all black money holders shall bring their money to whiten. In result when black money floods the stock markets even all those shares whose market value has reduced by 1000 %, which is 1100% below of original price, shall shoot to any level. But when these black money holders after earning many times of their black money investment shall withdraw their investments, it is not known that what lowest level these shares shall touch and who shall be trapped; more likely than not it will be the genuine investor whose money will be trapped. This scheme in no way can be categorized as whitening scheme, Muhammad Shoaib, first Martial Law Finance Minister was able to bring to kitty the ever maximum revenue under then martial law regulation, but extravagance of Ayub ruined the entire economy and industry of country, which then was flying. Excess value declaration of Ghulam Ishaque Khan Finance Minister of Zulfiqar Ali Bhutto, was able to bring some money to exchequer but handing over nationalized industries in corrupt hands, damaged more as did Ayub Khan. Zia-ul-Haque also brought declaration, collected money, Sartaj Aziz Finance Minister of Nawaz Shariff also brought amnesty, on privatization handed over privatized industries to his selected persons also played Qarz Utaro Mulk Sawanro'. Shaukat Aziz Finance Minister of Pervaiz Musharaf also collected revenues on 2% amnesty. But the current scheme, announced by the Government, is not asking for any tax or declaration, but is suspending section 111 of the Income Tax Ordinance, 2001 whereby Income Tax Department now Inland Revenue is empowered to tax this black money when it is declared/discovered by Commissioner, impose penalty equivalent to tax under section 184 of the Income Tax Ordinance, 2001 and prosecute under section 192-A of the Income Tax Ordinance, 2001. Instead damaging entire economic activity, stock exchanges and innocent investors, it would have been far better that the government gazettes names of those persons whom it wants protected from the mischief of section 111 of the Ordinance, or issue an S.R.O. for such persons. Proposed scheme is near to a Self Assessment Scheme introduced during Zia-ul-Haque period, in which scheme for new taxpayer was to file a taxable return along with wealth statement of any amount. Whereas before that scheme new tax payers were allowed capital only 3 times of declared income. When government has reached to this conclusion that section 111 of Income Tax Ordinance, 2001 is a hurdle in bringing new investments, then it is better advisable that sections 111, 184 and 192A of the Income Tax Ordinance, 2001 be scraped from statute book altogether. As there is no reason that small taxpayers, or poor citizens, are subject to these harsh punitive actions, taxes, penalties, prosecution may be for that on many simple reasons and occasions one has failed to document even genuine transactions, is thrown like an innocent lamb in front of a wolf; whereas admitted corrupts, looters are given a freehand and provided every opportunity to whiten their black money in past and today also, gotten through illegal means, bribes, smuggling, drug, abduction, ransom, killings as hired killers, extortions, tax evasions and all other illegal means. Thereby the country is portrayed as heaven for crimes as off shore cities and islands where the world's black money is accepted as genuine and legal deposit. But even in those countries no distinction is maintained that a particular investment/deposit is free of tax and others are subjected to tax, penalties and prosecution particularly when present governments present themselves of poor, labourers and peasants 'awami hookumat' middle class people etc. question arises that why for stock exchanges the country will be off shore and why for others a strict taxable area.