Drug trafficking & black economy
The international drug mafia is estimated to be involved in a business whose total transactions cross $600-800 billion year—Drug Report 2009 released by United Nations Office of Drugs & Crime on June 24, 2009 (for complete text visit http://www.unodc.org) The successive governments in Pakistan provided money laundering schemes to the black economy (although these were termed as good economic measures to dig out black money). Our drug barons hardly need any international channels for money laundering because support from the State is available at home. If any drug smuggler remits dirty money in Pakistan through normal banking channels, the tax authorities cannot pose any question about its ‘source’. Millions of dollars come into the country every year from bank accounts maintained in various countries in fictitious names, but no action is taken under the law.
In the Income Tax Ordinance 2001, a special provision [section 111(4)] exists to facilitate the money launderers to remit (laundered is more appropriate term) their ill-gotten money through banking channels and surrender the foreign currency to the State Bank and get Pakistani rupees as encashment. In this way they can escape not only taxation but any criminal proceedings as well. This scheme aimed at bringing huge foreign funds to Pakistani economy has succeeded immensely during Musharraf-Shaukat era when foreign reserves of Pakistan crossed the US$ 15 billion mark. Even today, it is being exploited cleverly by the Pakistani drug syndicates and tax dodgers to launder their money through State patronage. In the presence of this law can anybody take Pakistan seriously in its so-called measures against money laundering?
More at Drug trafficking & black economy