This can be a very interesting project assignment for exploring the questions that have been raised regarding whether uncollected receivables can be considered as income in personal tax declarations.
The esteemed Supreme Court of Pakistan’s five-judge bench has disqualified Prime Minister Nawaz Sharif because he was not deemed “honest” because “he did not disclose his aforesaid assets” and thus furnished “a false declaration”. The ‘aforesaid assets’ in the judgement referred to ‘unwithdrawn salaries’ of Nawaz Sharif which he was entitled to as a Chairman of the Board of Capital FZE.
It is very clear from the Court’s judgement, then, that what convinced the Supreme Court to disqualify a sitting Prime Minister elected by an overwhelming majority of Pakistanis was a) the interpretation by the Court of the technical term ‘asset’ and b) equating the salary that Prime Minister Nawaz Sharif did not withdraw with an ‘asset’. Therefore, it is very important for the lawyers of Nawaz Sharif, regarding their review petition, to be very clear about the accounting basis of their petition.
- Another one bites the dust
- Questions after the judgement
- Full text of Supreme Court order in Panama Papers case
Interesting questions being raised include:
- Does all kinds of receivables are necessary to be declared?
- How to cater to allowance for bad debts?
- Are receivables from salary income different from receivables from rental income in Pakistani tax laws?
- Are receivables from property transactions where there is a schedule of payments spread over several years have to be accounted for at the same time? When are they recognized as income and when as assets?
- What is the position of salary receivables across different countries?
- etc
For academics: Project Based Learning (PBL) and “Experiential Learning” involves “learning by doing” through real-life projects. Real life projects by definition cut across the boundaries of traditional subject boundaries. This project involves several subject areas such as Accounting, Finance, Taxation, Business Law, Political Science, Constitution and Sociology. It would be a great vehicle for discussing assets, receivables, income and the related taxation issues. See also Syllabus- Coverage is Enemy of Understanding, and Subject Compartmentalization vs Holistic Learning and Whole Life Orientation
Links to more information about SC Judgement :
- Is Nawaz’s unwithdrawn salary an asset?
- Reliance on dictionary instead of law surprises tax experts
- Another one bites the dust
- Questions after the judgement
- Full text of Supreme Court order in Panama Papers case
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