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Drug Economy

  • Date Submitted: 12/17/2011 02:54 AM
  • Flesch-Kincaid Score: 46.6 
  • Words: 1074
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Drug trafficking and the black economy
 
June 26 is the International Day against Drug Abuse and Illicit Trafficking. It is being marked since the United Nations General Assembly decided upon it in 1987 to raise awareness global about the dangers of drug abuse, to prevent its spread and to encourage efforts to combat the menace at international level.

Successive governments in Pakistan have been providing money-laundering schemes, termed as economic measures, to bring black money into the mainstream. These schemes have proved highly beneficial to tax evaders, drug barons, extortionists and corrupt businessmen-turned-politicians. Even today, if anybody brings any amount of money (earned from drug trade, tax evasion or any other criminal activity) in a bank account through remittance, the tax authorities cannot question its source.

The criminals just go to a money exchanger, give him money in Pakistani rupees, and he arranges “remittance” (sic) by charging a small premium. All the criminal needs is a fake CNIC (Computerised National Identity Card); we have 30 million such cards, as has been admitted before Supreme Court. In this way, millions of rupees are recycled as white money.

Section 111(4) of the Income Tax Ordinance, 2001, actually facilitates money launderers to remit their ill-gotten money through banking channels and surrender the foreign currency to the State Bank and receive Pakistani rupees in return. In this way they can escape not only taxation but also any query from the FBR. This scheme presumably aimed at bringing huge foreign currency to Pakistan has succeeded immensely as foreign remittances coming close to $11 billion this year. Although this scheme has greatly increased inflow of foreign currency (which is just recycled untaxed money) but our tax-to-GDP ratio has nosedived. The criminals say that in the presence of this lucrative scheme – where one can whiten money by just paying 2 percent premium – only a “stupid” person would pay...

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