Why is Saifullah Paracha Still Detained at Guantanamo?

The story of Pakistani-American businessman Saifullah Paracha’s disappearance, arrest, transfer to the notorious Guantanamo Bay prison, possible release and continued detention remains a mystery.

Paracha, 64, who theUSclaims was involved in terrorist activities, disappeared in 2003 while travelling fromPakistan. He was arrested fromBangkokon July 8 that year through FBI efforts and was transferred toGuantanamoon September 19, 2004.

Paracha was to be released in 2006 following a visit toGuantanamoby aPakistangovernment official, according to a confidential American diplomatic cable obtained by Dawn through WikiLeaks. But for reasons that remain unexplained, he is still under detention there and has been declared “high risk”.

According to the cable, the director of operations of the National Crisis Management Cell of the interior ministry, Lt-Col Imran Yaqoob (Wrongly named Imran Farooq in the cable), met American officials at the US embassy in Islamabad to discuss his visit to Guantanamo.

Yaqoob is reported to have said that the Pakistani delegation left with the impression that most of the Pakistani detainees were individuals who were “in the wrong place at the wrong time”, not extremists who posed a serious threat. He added that the delegation discussed the repatriation of these detainees with intelligence agencies at Guantanamo and the force commander at the prison, leaving with the impression that there were no major obstacles to repatriating six of them.

This group included Paracha, provided that the government of Pakistan would keep him in detention. According to Yaqoob, Guantanamo officials told the delegation that if the Pakistani government submitted a formal request for repatriation it would be received favorably.

Upon his return toIslamabad, the official prepared a report for the foreign affairs ministry in support of such a request.

 

Yaqoob did tell American officials inIslamabad, however, that for the government to keep Paracha in custody, it would need information from theUSto justify his continued detention, noting that Paracha’s family had a petition against his detention pending in the Supreme Court.

The US official in a note said that “Post will pursue the question of the GOP’s ability to hold detainees in custody with the MFA and other interlocutors.”

Yaqoob concluded by requesting that the embassy find out from colleagues inWashingtonabout the views of relevant agencies on the prompt repatriation of the Pakistani detainees. The American officer agreed to do so, but warned that it would be difficult to share these views frankly “when the government continues to leak stories proclaiming the detainees’ imminent release to the local press”.

In his comment theUSofficial said he appreciated word that theUSgovernment was moving forward with the repatriation and that “Post requests guidance from Department on next steps, including interagency coordination and coordination with the GOP of any press statements preceding or following the repatriation.”

But nothing seems to have come of these discussions between US and Pakistani officials, as Paracha is still detained at Guantanamo. An official assessment of the detainees, which includes a December 2008 dossier on Paracha and was also released by WikiLeaks, shows that he was determined to be “high-risk, as he is likely to pose a threat to theUS, its interests and allies”. He is also recommended for continued detention. A similar recommendation had also been made on Oct 24, 2007.

The assessment is based on what the US Department of Defence document calls the detainee’s own account and has been included without “consideration of veracity, accuracy or reliability”. It still apparently forms the basis of his continued detention.

“If released without rehabilitation, close supervision, and means to successfully reintegrate into his society as a law-abiding citizen (Paracha) would probably seek out prior associates and reengage in extremist activities at home and abroad,” the assessment says.

 

One of his sons, Uzair Paracha, had been arrested in theUSand charged with providing material assistance to Al Qaeda. He was convicted by an American court in 2006.

The American document termed Saifullah Paracha a “significant member” of Al Qaeda. In what the file describes as “custodial interviews” rather than interrogations, Paracha is said to have confessed to meeting Osama bin Laden twice, the first time in December 1999 or January 2000 and then again in the autumn of 2000, offering the Al Qaeda leader use of his television station to promote his message to the world.

Paracha is also alleged to have had close links with Khalid Sheikh Mohammed, who confessed to masterminding the 9/11 attacks, and his nephew Ammar al Baluchi, another senior Al Qaeda operative. But he told his captors that his interaction with Al Qaeda “was just business”.

One year after the Pakistani delegation’s visit toGuantanamo, when it became clear that Paracha was not going to be sent home, Amnesty International in October 2007 called for his release unless he was charged and given a fair trial in a non-military court.

According to media reports, an American lawyer representing Paracha said in June 2008 that his client did not deny meeting Al Qaeda figures but did not know their real identities or that they were connected to terrorism.

Hina Shamsi, director of the national security project at the American Civil Liberties Union, has told the media that the assessments “are rife with uncorroborated evidence, information obtained through torture, speculation, errors and allegations that have been proven false”.

Documents referenced: US cable WikiLeaks #76668, Guantanamo document # US9PK-001094. Documents are available on Dawn.com

 

An Effective & Clever Tax Policy Can Make the Difference in Revenue Generation

An effective and clever tax policy can make the difference in revenue generation, according to Huzaima Bukhari and Dr. Ikramul Haq.

This year’s Economic Survey candidly admits that tax base of Pakistan is both punctured and distorted “with some sectors under-taxed and some are not taxed at all” (page 50). 

Agriculture and service sectors account for 75 percent of GDP but their contribution in tax revenue is less than 10 percent. Petroleum sector alone contributes around 30 percent of tax revenue — the burden of which is borne by public at large.

Heavy indirect taxation– 79 percent of total revenue collection — is contributing towards inflammation and poverty. 

There are now 73.2 million people living below the poverty line. 

Unfair taxation and inequitable distribution of resources is the root cause of many socio-economic ills. State policies induce massive tax evasion (section 111(4) of the Income Tax Ordinance, 2001 is a permanent tool for whitening of untaxed money).

Pakistanfor the last decade has been witnessing below 10 percent tax-to-GDP ratio, whereas in our region evenSri Lankahas tax-to-GDP ratio of 15 percent. After 10 years of World Bank-sponsored tax reforms, we have ended up with a monstrous informal economy and rampant corruption in tax machinery.

Determination of a tax base capable of measuring an individual’s ability-to-pay is a major problem of our tax system. 

We have 100 million mobile users who pay both income tax and sales tax but only 1.3 million file income tax returns. Majority of mobile users may not have taxable income (Rs 300,000, raised to 350,000 from tax year 2012) yet they are burdened with undue liability. On the contrary, many rich people just pay a fraction of income tax (withheld at source) on their actual taxable incomes without bothering to file their income tax returns. 

If out of total population of 180 million, we have 10 million individuals having taxable income of Rs 1.5 million (this is a very conservative estimate), the total income tax collection at the current rate from them should have been Rs 3750 billion. If we add income tax collected from corporate bodies, other non-individual taxpayers and individuals having income between Rs 400,000 to Rs 100,000, the gross figure would be nearly Rs 5000 billion. FBR collected only Rs 520 billion as income tax during fiscal year 2009-10 and figure for this year would be around Rs 650 billion. This shows a whopping tax gap of 669 percent.

Similarly, in sales tax, federal excise and customs due to rampant corruption, the total collection is only 20 percent of actual potential. In fiscal year 2009-10, FBR collected Rs 516 billion under the head sales tax, Rs 16 billion under federal excise duty and Rs. 152 billion under customs. Total indirect collection of Rs 694 was pathetically low. It should have been at least Rs 3500 billion. If tax gap is bridged, the total revenue collection ofPakistanwill be Rs 8500 billion (Rs 5000 billion direct taxes and Rs 3500 billion indirect taxes).

It is tragic to note that the tax-to-GDP ratio touched its lowest level at 8.9 percent during the year 2009-10 from 9.8 percent in 2007-2008 (Page 51 of Economic Survey of Pakistan 2011) and this year it would just be 9.1 percent if FBR achieves the revised target of Rs. 1588 billion. The figures released a day prior to announcement of budget for 2011-12 by Ministry of Finance in the form of Economic Survey of Pakistan concede that the FBR has been facing the declining trend in the overall tax-to-GDP ratio, particularly in the two leading taxes — income/corporate taxes and sales tax. 

For meaningful increase in tax-to-GDP ratio, Pakistan needs to tax the sectors that are either outside the tax net or are under-taxed, crackdown on informal economy by introducing asset-seizure legislation of untaxed money and manage FBR through an independent Board as is the case with successful Mauritius Revenue Authority (MRA).

Statistics show that share of agriculture in the GDP during the year 2010-11 would be 22 percent while its share in taxes is just 1.2 percent, transport, storage and communication 13.8 percent (tax share 4.5 per cent), manufacturing 17.1 percent (share in taxes 62.2 per cent), wholesale and retail trade 16.9 percent (share in tax 2.8 percent), respectively.

These figures highlight the need for correcting distorted tax base. It is now well established — through the analysis of income tax returns filed this year — that the compliance level of traders is low while that of the corporate sector is unsatisfactory. The collection of sales tax (domestic) is totally inconsistent with the overall growth in the economy.

It was Louis XIV’s finance minister, Jean-Baptiste Colbert, who claimed that the art of taxation was to pluck the maximum amount of feathers from the goose with the least amount of hissing.

Colbert’s view was close to the truth, even in today’s world, but taxation in his day was not used as an instrument to achieve a broad range of economic and social objectives. Rather, it was a tangle of practices and customs designed to finance wars, private and public works, as well as pet schemes of the royal family — and their aristocratic hangers-on. In fact, until the 20th century, the notion of a progressive tax on income did not strike them as being virtuous. It is obvious that Pakistani rulers are still living in pre-20th century state of mind. 

In the second half of the 20th century a number of governments in the West realised that taxation was, indeed, a multifaceted instrument which, if used sensibly, could help each society attain its economic and social goals. This required a delicate balance between rewarding entrepreneurship, innovation and risk-taking on the one hand, and the need to finance important public expenditures on the other, including education and social programmes, as well as traditional public works.

There are only three main sources of tax revenue upon which governments depend:

• income
• capital
• consumption.

The governments have to be careful to avoid heavy tax burden on any one of these as it would cause distortions and inequities. In some cases, it might spur tax evasion or drive part of the economy underground. Wealth generation is important for any nation, but its redistribution through progressive taxation is the cornerstone of social democracy.

The present tax policy penalises the productive sectors, encourages wasteful spending and unproductive investment. Meaningful tax reforms require greater political courage and transparency. In its frenzy for collecting taxes from the poor, the government is undermining the economy’s growth potential.

Excessive taxation is preventing many individuals and businesses from taking full advantage of opportunities of the new knowledge-based economies. A fair and transparent tax system is essential for maximizing economic growth.

It is high time parliamentarians show courage to reject bureaucratic tax policy and suggest an alternative tax system, capable of achieving a sensible balance between income, capital and consumption taxes. They must also learn to use taxes for productive sectors, not on ill-designed programs.

Taxes should be employed in creating human capital (e.g. education, training and health), and necessary public infrastructure to both improve quality of human beings and increase productivity of the economy.

It is by no means an easy task inPakistan. But one expects the public is increasingly suspicious of political motivations and better informed through vibrant media about the impacts of undisciplined public finance.

Independent observers should monitor tax data and survey the costs and benefits of various approaches to taxation that have been adopted, changed, abandoned and reinvented over many years; they should give frank advice on reforms and best practices, and help the government reach consensus on tax matters. They should also explore new challenges, such as the problems of harmful tax competition and transfer pricing within large corporations. Simply put, the government must unshackle the constituent elements of economic growth by letting market forces play their respective roles. Simultaneously, governments must transfer the benefits of economic growth to enhance social well-being and cohesion through transparent and well-designed taxation. If the paradigm is made to work, Colbert’s geese would barely hiss at all.