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Pakistan loses Rs3 trillion annually, says economist –> The News

October 30, 2011 Leave a comment

Ansar Abbasi

Source : http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=9927&Cat=13&dt=10/29/2011

ISLAMABAD: Pakistan loses a whopping Rs3,100 billion annually, which if secured, could change the destiny of the country and its hard-pressed people, an international banker and economist says.

Dr Shahid Hasan Siddiqui, chairman and chief executive of Research Institute of Islamic Banking and Finance, Karachi, says Pakistan loses Rs1,200 annually because of corruption and another Rs1,900 billion because of tax evasion and non-imposition of taxes by the federal and provincial governments.

He said that the country’s economy is badly hurt by corruption, tax evasion, non-imposition of taxes on the rich and powerful, large size of black economy, lack of political will to unearth assets of billions of rupees acquired from concealed income though details of these assets are available in the government record, including bank deposits, amount invested in National Saving Schemes, shares and stock exchange, real estate and vehicles, etc.

He said that details of these assets are available in the records of banks, government departments and housing authorities, etc. and if compared with the income tax returns, would generate revenue of a few hundred billion rupees in a short span of time. “This would also go a long way in the documentation of the economy,” he said adding that this would also enable the government to reduce the rate of reformed GST to five percent from the existing 16 percent and abolish all sorts of surcharges and petroleum levies for the benefit of the people.

Such a step, he said, would bring immediate relief to the common man and would help reduce inflation to a single digit. The petrol prices, he said, would come down by Rs15 per litre and this would have a positive effect on the lives of the ordinary souls.

Explaining the details of his assessments, he said that according to Transparency International and World Bank, 40 percent of the development budget of the country was misappropriated or corrupted i.e. Rs280 billion out of the total Rs700 billion development expenditure.

In addition, he said corruption and misappropriation from government procurements also cost the exchequer a few hundred billion rupees more besides Rs300 billion loss due to corruption in the public sector enterprises.

He lamented that only 1.8 million out of 180 million population pay income tax whereas there are innumerable corporate concerns that earn millions but declare income of mere Rs100,000. He said the export sector hardly contributes to the income tax revenues whereas the agriculture sector, whose share in the GDP is about Rs3,620 billion, pays hardly a few billions as tax.

Siddiqui added that stock exchange’s market capitalisation is Rs3,600 billion but has been taxed only last year and that too half-heartedly. Referring to the 2007 economic survey, he said that the official estimates disclosed that since there was no gain tax on stock exchange, so the country lost Rs112 billion in one year. “Now it has been imposed but half-heartedly to generate a couple of billion rupees only.”

He added that Pakistan’s powerful cement, sugar and textile sectors hardly pay any income tax whereas properties and bank deposits are mostly not declared and thus no income tax is given. He added that GST is paid by ordinary people but it is not fully deposited with the FBR.

Similarly, he said, professionals like engineers, doctors, lawyers and architects don’t pay income tax on most of their income. He added that the tax-to-GDP ratio in Pakistan is 9.5%, which is the lowest in the region. In the regional countries, this ratio is between 14-18 percent. “If we improve our tax ratio to 16 percent, it would mean generating additional taxes of Rs1,400 billion annually,” Siddiqui said.

He also talked of fictitious exports and imports, which he said are about 25% of the total exports and imports. Quoting official figures, he said the total rise in exports recorded by the State Bank during the period 2002 to 2007 was $7.8 billion, out of which $5.5 bn was fictitious.

 

Reko Diq gold war gets dirty–>By Shaheen Sehbai, The News

November 26, 2010 Leave a comment

By Shaheen Sehbai

Source : http://www.thenews.com.pk/24-11-2010/Top-Story/2259.htm

WASHINGTON: The mystery of Reko Diq gold mines deepened on Tuesday as the Supreme Court prepared to hear the case on Wednesday, when Tethyan Copper Company (TCC), the Canadian-Chilean giant working in Balochistan, issued a long statement which coincided with a stinging attack on TCC by a US company which has eight exploration licences in Pakistan,

including two in Reko Diq. The official statement by TCC (reported separately in these columns) came 20 days after the original story by The News on how Reko Diq was being sold for a song by the Pakistani government but the statement by Benway Corporation of New York was a stunner as its president and CEO accused TCC and its principals of playing games with Pakistan.
He levelled serious allegations against TCC and Barrick Gold Corporation and announced his company will soon request the Supreme Court of Pakistan to become a party in the Reko Diq case. The company said Reko Diq deposits had not been fully declared to the government of Balochistan by its sponsors.
“They are playing games with their government of Balochistan partners,” CEO and president of Benway Corporation, Sheikh Tanvir, a Pakistani-American, said in the statement. The TCC statement added further confusion to the already complicated situation about the original size of the deposits at Reko Diq, the share of Pakistan and whether laws were followed or twisted.
TCC claimed that the mineral resource at Reko Diq was estimated at 5.9 billion tons. “From this resource, an estimated 2.2 billion tons of economically mine-able ore, with an average copper grade of 0.5 per cent and an average gold grade of 0.3 gms per ton will be processed to produce 2.2 billion pounds of copper (10 million tons) and 13 million ounces of gold in form of payable metal in about 56 years of mine life.”
But this statement militates directly against what the Barrick Gold of Canada told the Canadian and American Mines Handbook, 2009-2010, a bible of the mining industry. It shows Barrick’s 37.5 per cent share of measured and indicated resources in Reko Diq was equal to 1,125,071,000 tons average 0.008 opt gold, for 8,487,000 ounces of gold and 11.5 billion lbs of copper. Inferred resource was shown as 895,089,000 tons average 0.009 opt gold, for 8,398,000 ounces of gold and 8.5 billion pounds of copper.
If this estimate is the share of Barrick, then the Chilean share is exactly the same and Pakistan’s share would be slightly less as Pakistan has 25 per cent stake as against 37.5 per cent each of the two big companies. Experts have to calculate the worth in the present bullish gold and copper market.
The confusion gets further confounded as a 2008 study conducted by both these companies involving top experts of Geology and mining reported much larger deposits. This study was published in “Economic Geology”, a bulletin of the Society of Economic Geologists (Vol. 103 December 2008 No. 8), written by Jose Perello of Antofagasta of Chile, Abdul Razique and Asad-ur-Rehman of Tethyan Copper Company, Pakistan and John Schloderer of Albidon Ltd of Australia.
These experts concluded that the 300-km-long Chagai porphyry copper belt had 48 deposits and prospects containing porphyry-type alteration and mineralisation. “Three medium-sized porphyry copper deposits are present in the belt at Saindak and Tanjeel and H8 at Reko Diq, the former currently providing small scale production. The H14-H15 copper-gold deposit at Reko Diq, currently at the feasibility stage, is world-class and contains open pittable resources of approximately 18 million tons of copper and 32 million Oz of gold.”
So while on Tuesday TCC claimed that Reko Diq had only 2.2 billion pounds of “mine-able” copper (10 million tons), these experts hired by TCC in 2008 had found the deposit of copper to be 18 million tons. Likewise while TCC today says gold deposits are only 13 million ounces of “payable” metal, the experts had estimated it to be 32 million ounces.
What is the difference between a “mine-able” and “payable” ore and by using “ton” and “tonne” in the same statement is not evident to ordinary people but the US company, also working in Reko Diq, in its statement on Tuesday said TCC was twisting words.
“For some 15-20 days we hear TCC keeps saying they are doing everything according to Balochistan Mining Rules of 2002. They say they are doing everything lawful in Pakistan. We disagree with most of what they are telling Pakistani people and the media. They are not fully telling the truth. They twist words,” the Benway statement said.
Sheikh Tanvir heads Benway, a privately held corporation incorporated in New York State since 1998 with 38 shareholders, mostly US citizens, a Canadian, an Australian, a Turk and three 3 Pakistanis. Its business is mining and works to discover copper and gold deposits.
His statement revealed that Barrick Gold Corporation went to Benway in 2007 to go into a joint venture with Benway on EL-24 in Chagai Balochistan, owned by Benway, located south of Reko Diq with a 30 km long common border.
“Barrick in 2007 offered us a package of $10.6 million. We refused that very very low offer. Then Barrick and Antofagasta’s front company TCC invited Balochistan officials to Toronto and Chile and ended up building an airport on EL-24 instead of their EL-5. We went to Balochistan High Court against 3 international companies and their front company, TCC Pakistan,” the statement said.
Benway accused Barrick Gold of playing games “with your partners and host country.” “They please officials of GoB and GoP and convince those officials to play games for the sponsors. We believe business must be done truthfully and ethically. Reko Diq was found in 17 years and we believe we have similar deposits and we found this in 3 years. These mining companies are stifling the competition and pushing fair competition laws of US and Pakistan.”
The US company claimed that Barrick Gold had broken Canadian laws. “They have broken Australian laws and they have criminally broken US laws of Foreign Corrupt Practices Act. They have broken Pakistani and Balochistani laws by their tangible actions in Balochistan and Pakistan. We believe that highest officials of these corporations are involved, some of them hold the highest civilian awards of Canada.”
The company said now that the Supreme Court of Pakistan was hearing the matter, we are happy that truth will emerge soon. “We are in BHC since May 2008 and we will approach the SC soon to allow us to be disposed in BHC in a speedy manner and/or kindly enter us as the main injured party in SC.”
“We are against the law breaker mining companies. We believe Pakistan and Balochistan are not dependent on a few bad eggs of the mining industry. There are 150 major mining and over 3000 junior mining companies in the world. Pakistan has 1000 choices. It is not because of terrorism that mining companies are not coming to Pakistan. It is because of corruption of officials, politicians and Pakistanis not following Pakistan’s own rules and laws. We will show Pakistan who is right and who is wrong,” the statement concluded.

Resignation,fair trial and way to go ahead…

August 18, 2008 3 comments

Finally the dictator who ruled (or ruined ) the country for 9 years has finally resigned (Congratulations Pakistan).

Now its time for the present government to give him a fair trial which is the right of every Pakistani, we don’t want revenge as Bilawal Zardari said also we don’t want a safe passage but all we want is a fair trial in front of an independent judicial commission which will comprise of credible people and will be responsible to investigate and on the bases of those investigation launch a trial against Pervaiz Musharraf.

Now the coalition government has no excuse to delay the restoration of judges and undo the unconstitutional measures by General (R) Musharraf.

Also instead of blaming the previous government for current crises (we all know how bad they performed), the current setup must focus on resolving the issues and if they can’t do it then instead of wasting nations time and resources they should leave the government otherwise the nation will rise against them with unity and force more stronger than they used against the dictator because the current government is elected by people.

The nation must not stop their struggle here .We still have to achieve the goals of free judiciary, social and economic justice and to achieve the true spirit of freedom with responsibility and rule of law.

Can we do it again?

February 7, 2008 Leave a comment

“I particularly appeal to our intelligentsia and Muslim students to come forward and rise to the occasion. You have performed wonders in the past. You are still capable of repeating the history. You are not lacking in the great qualities and virtues in comparison with the other nations. Only you have to be fully conscious of that fact and to act with courage, faith and unity.”(Muhammad Ali Jinnah,Delhi March 23, 1943)

The message given by our Quaid on Pakistan day is still valid today, the change we want in Pakistan, the concept of justice to be prevailed in the country and the prosperity require an effort from the whole nation specially intelligentsia and students(with courage, faith and unity).

Can we do it again?

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