Tax bill may cause capital flight, say legislators

Lawmakers on Tuesday feared that money would fly out of Pakistan, economic growth would suffer and many jobs would be lost due to proposed restrictions on ineligible persons and the informal sector, but the government instantly dismissed such assertions. Members of the National Assembly Standing Committee on Finance described amendments to tax laws as "draconian", aggressive and tantamount to empowering taxmen who were not credible. "Money will fly elsewhere, if the government tries to clamp down on the informal economy," remarked Committee Chairman Syed Naveed Qamar. It is no easier to channel money to Dubai or elsewhere because these destinations now also generate suspicious transaction reports (STRs), said Ali Pervaiz Malik, Minister of State for Finance and Revenue.