In a new tax-amnesty scheme, our federal cabinet is mulling to declare money laundering `terrorism’. Counter-Terrorism Department of the police would investigate such cases. Our lackadaisical performance to bring back financial offenders abroad deflates trust in the police investigation.

The FBR proposed rate-slabs, 1 to 5 percent, 10 percent, and 15 percent, for various categories of offenders. The Financial Action Task Force has advised that `the amnesty scheme must not allow whitening of criminal proceeds in the shape of money laundering and terror financing through. The real problem is illicit money, cash-based economy, and the common person’s distrust in banking transactions. In a digital system, imagine how difficult it would be for a corrupt person (bureaucrat, politician, et. al.) to take sacksful of black-money currency notes to a bank to buy `white’ prize bonds.

The government could prevent money laundering through simple steps like (a) making it tax-free and easier for ordinary unbanked people to open accounts, and borrow. To bypass banking paperwork, less than 25% of people in developing countries fall back on formal sources for emergency financial needs.

(b) Mobile users require internet access or digital financial services. (c) Introduction of Chip cards to switch over from cash to digital payments (up to prescribed limits) and receipts. All payments in the private and public sector should be through accounts operated by foolproof chip cards.


Rawalpindi, April 17.