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What is Toshakhana scandal?

What is Toshakhana scandal?

The word ‘Toshakhana’ has been all over the news cycle lately, after Prime Minister Shehbaz Sharif alleged that his predecessor, Imran Khan, had sold state gifts in Dubai worth Rs140 million.

The items, presented to him by rulers of foreign countries, reportedly included a wristwatch from the crown prince of Saudi Arabia. The Pakistan Tehreek-i-Insaf (PTI) has been avoiding sharing the details of gifts received by Mr Khan from foreign heads of state, and deposited with the Toshakhana.

PM Shehbaz’s allegations

During an interaction with senior journalists, Prime Minister Sharif accused the PTI leader and former prime minister Khan of selling gifts received during foreign visits.

“I can confirm that Imran Khan sold state gifts worth Rs140 million from the Toshakhana in Dubai,” he alleged, adding the valuable state gifts included diamond jewellery, bracelets and watches.

PM Shehbaz said that he also received a watch once, but deposited it to the Toshakhana, adding that he “does not need to hide anything”.

Answering journalist’s query, the PM explained that under the rules, the gifts received from another state or country are deposited in Toshakhana, saying the State Bank of Pakistan (SBP) determines gift’s value. In case of auction, the SBP and the Federal Board of Revenue revalue the gift, the PM added.

As per media reports, Imran Khan received 58 gifts of more than Rs140 million from the world leaders during his three-and-a-half-year stint and retained all of them either by paying a negligible amount or even without any payment. 

PTI’s response

Pakistan Tehreek-i-Insaf (PTI)’s close aides appear to give contradicting statements – while Dr Shahbaz Gill has claimed the former premier had not sold any gifts, Fawad Chaudhry appears to confirm the allegation, stating that there was nothing wrong with the way the gifts were disposed of.

“What is the offence if the [then] prime minister sold the watch he had bought from the government?” Fawad asked. “It doesn’t matter if the watch is worth Rs50 million or 100 million […] if it is mine and I sold it, there shouldn’t be any objection.” He said he was unable to understand what exactly PM Shehbaz’s allegation is.

“Shehbaz Sharif is confused and he can’t decide how to level allegations against Imran Khan,” Fawad said and advised PM Shehbaz to avoid superficial gossip and focus on national issues.

What is the law?

Toshakhana is an official department under the administrative control of the cabinet division, which was established in 1974, to store precious gifts given to our rulers, parliamentarians, bureaucrats and other government officials by other heads of governments, foreign dignitaries, etc, whether as goodwill gestures or simple routine matters on official tours.

Under the rules, it is mandatory that gifts of a certain value are deposited in Toshakhana. However, an official is also allowed to keep these gifts provided after he pays a certain percentage of the price assessed by the Toshakhana evaluation committee.

Those interested to retain the gift can do so by paying a certain amount of the value which was 20 percent at the time Imran Khan had retained the gifts. The rules were revised in December 2018 that required the payment of 50 percent to retain these gifts. The ones which are not retained remain deposited with the treasury or can be auctioned and the money acquired through the sale is transferred to the public exchequer.

What should be done?

The way the Toshakhana department is being run only encourages corruption and misuse of yet another official facility. Clearly, the option of letting officials keep the gifts they receive upon partial payments at rates calculated officially is not working out.

Meanwhile, the PTI government had been unnecessarily cagey when asked to provide details of gifts presented to Mr Khan since 2018, resorting to the implausible argument that such disclosure would jeopardise international ties.

Its insistence on keeping the information out of the public domain naturally gave rise to speculation that something was perhaps not quite kosher about how the Toshakhana was being managed.

To prove that was not the case, the PTI must cooperate fully with the investigation, which should also look into how the value of the gifts was determined before their sale to Mr Khan and perhaps others on reduced rates.

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