CHANGING established practices that have served the nexus of power is not easy, especially in Pakistan. Therefore, the success of progressive changes inserted in the legal framework will depend on civil awareness and the public’s demand to follow through with them.
The country made a long overdue move last week towards greater transparency, credibility and reliability by enacting the Benami Transaction (Prohibition) Law.
The fact that it took the country a good 16 years, after it decided to shun the benami system (where the real owner of an asset is undisclosed) in 2003, reflects the hold and influence of the beneficiaries on the opaque framework of the state structure.
The mighty elite have yet to digest the radical change in the legal framework and make adjustments to shield its undeclared assets.
The move, market watchers expect, will spark fear when the full implications of the Benami law are understood. They foresee a fall in property prices going forward as benami holders rush to dump their assets in the market to ward off the risk of confiscation.
“I anticipate a surprisingly rich haul from this move,” an expert commented referring to expected action against benami bank accounts.
There is little doubt that if implemented diligently the said law can minimise and, over time, eliminate the abuse of a loophole (benami) in the legislative framework. This has traditionally been used to conceal wealth and its movement, presumably to evade tax and/or obscure illicit purposes.
Market watchers foresee a fall in property prices as benami holders rush to dump their assets in the market to ward off the risk of confiscation.
The relevant circles in Islamabad declined to quantify the possible impact of the said law in terms of unearthing hidden wealth which has been parked in bank accounts and property.
The hierarchy was not able to offer a convincing response on how the Federal Board of Revenue (FBR), that has failed to perform its basic function (revenue collection), will shoulder the additional responsibility of identifying rogue owners of accounts and properties in the country.
Experts believe the process initiated by the enactment of the law will take about a year before justice is served on owners of benami fixed or liquid assets. “The fate of properties and accounts attached in the initial phase will set the tone and establish the efficacy of the exercise,” commented a senior officer in the FBR.
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