TAX declarations of holders of public office - in fact all taxpayers - do not enjoy ‘confidentiality’ and ‘secrecy’. Declarations have to be provided by the Federal Board of Revenue (FBR) as and when required by the Election Commission, the State Bank, the National Accountability Bureau (NAB), the Anti-Narcotics Force and the Federal Investigation Agency (FIA) in respect of any inquiry conducted by them.
There exists confusion and misconception in certain circles that the Income Tax Ordinance, 2001, guarantees “complete confidentiality” for tax declarations as well as the documents filed and that tax officials cannot divulge their details under any circumstances. The correct position is that the FBR can even publish tax declarations of all taxpayers with the approval of the federal government - though it was done only once in 1993 and thereafter the practice was discontinued to protect the rich and powerful tax evaders.
Section 216(1) of the Income Tax Ordinance, 2001 says that all particulars contained in any statement made, return furnished, or accounts or documents produced or any evidence given, or affidavit or deposition made, in the course of any proceedings under this law or any record of any assessment proceedings or any proceedings related to recovery of a demand shall be confidential and no public servant save as provided in the ordinance may disclose any such particulars.
There are many exceptions to this rule as contained in subsections (3), (4) and (5) of Section 216. For example, it is clearly provided in subsection (5) that nothing contained in subsection (1) of Section 216 shall prevent the board from publishing, with the prior approval of the federal government, any particulars filed by any taxpayer and subsection (6) in categorical terms states: “Nothing contained in subsection (1) shall prevent the federal government from publishing particulars and the amount of tax paid by a holder of a public office as defined in the National Accountability Bureau Ordinance, 1999 (XVIII of 1999).”
When about 70 percent of Pakistani legislators – members of the Senate and the National Assembly – were exposed for not complying with Section 116(2) of the Income Tax Ordinance, 2001 by failing to file tax returns, wealth statements and personal expenses having taxable income of Rs500,000 in tax year 2011, they accused the FBR of “illegally” disclosing data. On the contrary, the FBR was proven guilty for not taking any action against these defaulters and not publishing their tax data which would have ensured transparency in the electoral process.
However, it is worth noting that violation of tax laws is not confined to parliamentarians. The elite – members of the civil-military bureaucracy, the landed aristocracy, politicians, religious and spiritual leaders, loan beneficiaries, unscrupulous business tycoons – flout the laws of the land with impunity and take pride in doing so. Since assets and tax declarations of powerful civil-military-judicial hierarchy are not available, the citizens cannot know how much state land was given to them at throwaway prices and whether they paid tax on differential of market value as envisaged in Section 13(11) of the Income Tax Ordinance, 2001 for this and other similar favours at taxpayers’ expense.
This is the stark reality of today’s Pakistan – legislators make a mockery of laws enacted by them, and the civil-military-judicial complex takes cover under special laws to avoid public disclosure of assets and tax declarations. Article 19A of the constitution says that “every citizen shall have the right to have access to information in all matters of public importance subject to regulation and reasonable restrictions imposed by law.” Explaining the scope and import of this fundamental right, added in the supreme law of the land through the 18th Amendment, Justice Jawad S Khawaja in his note in Watan Party & Others v Federation of Pakistan & Other PLD 2012 Supreme Court 292 (commonly known as the ‘Memogate Scandal’) held that “Article 19A has thus, enabled every citizen to become independent of power centres which, heretofore, have been in the control of information on matters of public importance... Article 19A is a grant of the constitution and, therefore, cannot be altered or abridged by a law enacted by parliament... It, therefore, will not be for this court to deny to the citizens their guaranteed fundamental right under Article 19A by limiting or trivialising the scope of such right through an elitist construction whereby information remains the preserve of those who exercise state power.”
Since the Supreme Court has championed the cause of people’s right to information in PLD 2012 Supreme Court 292, it is a legitimate expectation of the citizens of Pakistan that as a first step, the honourable judges of the Supreme Court and high courts voluntarily make public their assets and tax declarations. The chief election commissioner and other members of the ECP should also do it at once to counter the criticism of the parliamentarians who feel that they have been singled out in respect of disclosure of asset and tax declarations. The exercise of the constitutional right to access to information in all matters of public importance is necessary for transparency, accountability and good governance – essential elements of democratic dispensation. At the heart of Article 19A is ensuring the accountability of all. Logically, the right to information must start from those who judge, adjudicate and legislate. While legitimate concerns have been expressed about blatant violations of tax laws by the parliamentarians, no effort is made till today to public the tax and asset declarations of the powerful military-civil-judicial trio that has been the beneficiary of state lands and has never paid tax on the lands as required under Section 13(11) of the Income Tax Ordinance, 2001.