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Photo Source: Dawn

Pakistan Reader# 569, 14 March 2023

Toshakhana gift controversy explained



The disclosed records brings the Toshakhana’s laws under scrutiny

Femy Francis

On 13 March, Lahore High Court directed the federal government of Pakistan to submit the Toshakhana records prior to 2002. Justice Asim Hafeez said that the judgment would be passed after analyzing the records as the petitioner Munir Ahmed's counsel demanded the publication of Toshakhana repository registration since the creation of Pakistan. They cited public was entitled to information on all kinds of public transactions under Article 19 of the Constitution.

On 05 March, Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan evaded being arrested by the Islamabad Police against the courts’ non-bailable arrest warrant, over his continued absence in court regarding the Toshakhana case. Imran Khan was accused of misappropriation of gifts and was questioned on auctioning of the gifts. The nominee is obliged to pay 20 per cent of valuation of the gift to retain the gift before auctioning them. Toshakhana is a government department that keeps depository gifts given to Pakistan officials and leaders during their tenure, where they can retain the gifts by paying a nominal price.

On 12 March, the Pakistani federal government published a 446-page document of Toshakhana gift records from 2002-2023. On 13 March, Jamia Naeemia’s religious scholars said, “purchasing gifts from Toshakhana at reduced prices [is] tantamount to breach of (public) trust.”

The disclosing of records has raised various questions over the regulations and the misusing of lax laws of Toshakhana. While the issue first came to light accusing Imran Khan of false declaration of gifts, the record shows that almost all presidents and bureaucrats exploited the lenient law.

First, a record of profitable gifts retained by Pakistan's delegates. President Asif Ali Zardari received 182 presents; he was gifted the most expensive Lexus and BMW for PKR 107 million, he retained them by paying a meager PKR 16.7 million. Imran Khan received gifts worth PKR 100 million and only paid PKR 20 million for them. Pervez Musharaf retained 126 gifts by paying 15 per cent of the assessed value and most free of cost. Shahid Khaqan Abbas paid PKR 46.5 million for keeping gifts valued at PKR 233 million. Not only the Prime Ministers but the bureaucrats and the families of the leaders benefited from the provision. Ishaq Dar received gifts valued at PKR 9 million and former Minister of Water Khawaja Muhammed received gifts worth PKR 58 million and kept them by paying 20 per cent of the value.

Second, purposeful undervaluation and ignoring inflationary cost of the gifts. The gifts registered under the Toshakhana are recorded at low prices which would provide ancillary benefit to the officials for retaining these gifts at a nominal price. The registered gifts/articles were never subjected to inflationary adjustments throughout the years. Considering the exponential rise in prices parity, the valuation of the gifts should have been altered as per the exchange rate.

Third, exchanging gifts paid by tax money. The issue with officials making such magnanimous profits becomes further problematic as they reciprocate the gifts which in place are paid with tax money. This would mean that the officials are making a profit from the gifts they receive, however, the reciprocity is not charged through their personal funds. Hence the rights of these officials to retain the gifts are questioned as it is the public who pays for the exchange.

The disclosed records have shown the invariable benefits the elites received and how the Toshakhana’s laws has been misused owing to its lax provisions. The published reports have garnered heavy criticism especially when Pakistan is facing an economic crisis. It has brought the Toshakhana’s laws under scrutiny with suggestions made to alter the law by marking the evaluation of articles based on market prices. Additionally, there have been suggestions to establish an independent authority that judges the value of the gifts. Stricter regulatory laws are desired wherein, over a certain value, rare gifts cannot be retained.

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