For many years, we have known that corrupt politicians and bureaucrats have plundered the nation’s wealth and stashed it in banks abroad. Now things might change as we might finally know how much of this money is held in Switzerland.
Switzerland is widely known as a tax haven and had long-defended its banking secrecy laws against international pressure. However, in a turn of events, the Swiss government decided to adhere to new standards on sharing bank information. The move was aimed at preserving the reputation of the Swiss financial system, and avoiding sanctions on Swiss banks or companies by the European Union.
Money laundering and international tax evasion is a problem not just for developing countries, but even for rich nations. It has become increasingly easy to deposit and manage funds with banks in other countries, thus large sums of money escape tax authorities each year.
The Swiss parliament has approved the automatic exchange of bank data with eighteen countries including Pakistan from 2021. Although it will take one year, Pakistan will eventually receive information of bank accounts held by its citizens in Swiss banks. This financial data must treated confidentially and be used only for tax purposes.
Foreign Minister Shah Mehmood Qureshi has said that the agreement will bring transparency in shifting money from Pakistan to foreign destinations, improve the accountability process and create hurdles in corruption. He is keen for the government to take advantage of the opportunities the new legislation will offer.
In 2014, it was revealed that $200 billion of Pakistan’s money was stashed in Swiss banks. The National Assembly was stunned over claims by then finance minister Ishaq Dar. The government was unable to make any efforts to get the money and backtracked. Dar managed to evade responsibility and now resides in London as an absconder from several corruption cases.
The PTI has been riding high on claims that it will return the money stashed abroad. Murad Saeed once said that the money will be returned immediately upon Imran Khan coming to power but the promise was dismissed as purely political rhetoric. Yet the government still believes that Pakistani nationals could have stashed away a hefty sum of $11 billion in more than 152,000 offshore accounts which has presumably been never declared.
The time has finally run out for excuses. The government will have to take steps to bring back the funds illegally taken out of the country and stashed in Swiss banks. This could help reduce our foreign debts, be used in development projects and make Pakistan a prosperous country.