20000203

'Rs 600 bn annual losses

due to fiscal corruption

may be cut by

combating tax evasion'

RECORDER REPORT

KARACHI: The cost and management accountants have suggested that the losses caused to the economy every year due to financial corruption to the tune of Rs. 600 billion can be minimised by preventing evasion of taxes and controlling public sector organisations and governmental expenditures.

The suggestion was made by the ICMAP working group on 'Fight Against Corruption' which met at the institute last week under the chairmanship of M.H. Asif, President ICMAP.It suggested a number of viable solutions for eradicating corruption.

After a threadbare debate, the Group opined that the quantum of financial corruption in Pakistan exceeded Rs 600 billion per year. If a significant portion of losses due to corruption including tax-evasion was checked many of country's economic problems would be solved.

The working group which included representatives from vital public and private sector organisations estimated that losses in addition to misappropriation of external debt and utilisation of foreign currency accounts included Rs. 250 billion per year on account of tax evasion and exemptions; Rs. 100 billion due to misappropriation and mismanagement in public sector organisations; Rs. 75 billion on account of misappropriation in annual development and non-development expenditure and Rs. 25 billion due to unprofessionalism in public sector's banks and DFIs.

The group suggested that as a first major step to identify the corruption on a continuing basis, the government could appoint an outside independent agency. The data base would then be matched with the record to identify defualters.

The group discussed issues relating to 'corporate financial reporting', defaulted loans, public servants pay procedure and privatisation etc and said that it would come up with specific recommendations soon.

It expressed the hope that the government's sincere efforts to fight corruption would bring fruits but better results could be achieved if the government came up with fast moving and transparent strategy and give wider publicity to government actions against corruption.