Ka-Ching! Honesty Really Could Be The Best Policy

The Federal Board Of Revenue & "The Whistleblower Protection Act"

Today the people of Pakistan received a pleasant surprise when they checked the morning papers: there is a possibility that somewhere in the future, private citizens might actually be remunerated for their efforts to protect the national economy!

The idea, outlined by the FBR Chairman, is brilliant from the following points of view:

1. If a party exposes the wrongdoing of another party, an enmity is born. That enmity will go on for years or decades, perhaps even spanning generations. How long will even the most efficient police force protect anyone from being punished for doing the right thing? But if the authorities give him the wherewithal to protect himself & his loved ones, they will have picked the candidate best suited to the job.

2. At the moment, the Federal Government is repeatedly expressing its disappointment over the approximately US$1 billion shortfall in tax revenue reported by the FBR. If there really is a problem (& this information isn't born of an error in the media), that means that certain parties who collectively are worth US$1 billion in taxes, have managed to fly under the radar. Anyone who has seen Tom Cruise's "The Firm" would know that a cunning accountant can pull off a fraud like that; while lots of people can tell that a crime has been committed, relatively few can unravel how it was done.

The Effect On The Market

This legislation, if it is passed, is expected to have a noticeable effect on insiders who can be potential witnesses to financial fraud, likely within their workplaces. It is meant primarily as a reward for helping the authorities supervise the economy properly.

But, private sector financial analysts are generally sceptical of the idea that you can get someone with inside information on the tax fraud of his rich employer to open up & start sharing. Many wouldn't do it for all the money in the world.

The real effect will be on the education sector; the popularity of subjects like Forensic Economics & Forensic Accounting will skyrocket, because all of a sudden it will pay to blow financial conspiracies wide open.

The Effect On The Public

The most popular Supreme Court Chief Justice in recent times has been Justice (r) Iftikhar Muhammad Chaudhry. He made two lasting contributions to Pakistani society: he successfully opened (& closed) a number of cases so sensitive that most other people were afraid to even speak of them; & he introduced the idea to the common man that his problems count. He achieved both these things by shining the spotlight on Article 184(3) of the Constitution of Pakistan, which is as follows:

"Without prejudice to the provisions of Article 199, the Supreme Court shall, if it considers that a question of public importance with reference to the enforcement of any of the Fundamental Rights conferred by Chapter I of Part II is involved, have the power to make an order of the nature mentioned in the said Article."

If the Whistleblower Protection Act is as advertised & is actually passed, it will be to financial "rights" what Article 184(3) is to fundamental rights in Pakistan.