Faced with a grand bargain on the Taliban, Pakistan waffles


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The shooting of a 14-year-old student, Malala Yousafzai, has led to unprecedented public demands that the government and army comprehensively deal with the threat posed by the Pakistani Taliban, but there are growing indications that this window of opportunity will be wasted.

Not since September 11, 2001 had Pakistan felt such anger and grief as after the attempted assassination of Malala and the wounding of her two school friends on October 8 in the Swat valley. The Pakistani Taliban, who have twice claimed responsibility for the attack, fired bullets into Malala's head and neck. She is now receiving treatment in Britain under massive security, having become a symbol of girls' education and taking a stance against the Taliban.

It was 10 days after the incident before the government tabled a half-hearted resolution in parliament, advocating a military operation in North Waziristan, a tribal region bordering Afghanistan from where multiple extremist groups spread terror in Pakistan, Afghanistan and Central Asia.

However, the government of President Asif Ali Zardari did not press the resolution, while the major opposition party, the Pakistan Muslim League (N), led by Nawaz Sharif, shot it down saying any offensive could delay or postpone general elections to be held by next March.

Right-wing politicians such as Imran Khan and heads of Islamic parties oppose an offensive and even refuse to blame the Taliban for the attack, despite their claim that she is a US agent and threats that they will try to kill her again.

After a meeting of senior army commanders on Wednesday, the military said it would not undertake any offensive without a full national consensus among all political parties, and between the government and the army. This is an enormous climbdown by the ruling elite, and an opportune moment is being wasted.

The mastermind of the murderous attack on Malala was Maulana Fazlullah, the leader of the Swat valley Taliban. His forces were defeated by the army in 2009 when public opinion was first mobilised after a video showed Fazlullah's gunmen flogging naked women.

The army, facing enormous pressure from the public, and from the US and Nato, sent 80,000 troops to clear the Swat valley, but Fazlullah and his commanders escaped across the border into Kunar province in north-eastern Afghanistan. Since then, Pakistan has rejected US and Nato pressure to send troops into North and South Waziristan.

Meanwhile, Fazlullah has relaunched his movement, attacking army posts inside Pakistan's tribal belt, beheading security force members and carrying out other atrocities, and then retreating to Kunar where the army cannot touch him. Pakistan has long accused Afghan intelligence services of providing a safe haven for Fazlullah's men, who are reported to number over 1,000.

If Kabul is harbouring Fazlullah, it is only a return payment. Pakistan has done exactly the same thing since 2002, allowing Afghan Taliban a safe haven in Pakistan from which to launch attacks across the border against US and Afghan forces. Recently, a border war has erupted with Pakistani forces shelling Afghan villages and Fazlullah's camps in Kunar, the Afghan army retaliating, and the US pounding Pakistan's tribal areas with drone missiles. The Afghan political elite is incensed, while President Hamid Karzai has berated the Americans for not doing more to stop Pakistan.

The widespread public revulsion in Pakistan over the attack on Malala gave hope that if the army were to launch a military operation in North Waziristan, in return the Afghans might refuse Fazlullah space to operate from Kunar. Otherwise, the Pakistan army would not carry out a unilateral offensive in North Waziristan, because the bulk of the Pakistani Taliban would just flee across the border into Kunar.

Instead, mutual steps could be taken by US and Afghan forces on that side of the border to eliminate or push out Fazlullah. Pakistan's offensive could deal with its terrorist threat at home, while also persuading the Afghan Taliban leadership living in Pakistan to talk with the US and Afghan government in the search for a long-term political solution to Afghanistan's civil war. By giving the Afghan Taliban a timetable to negotiate a power-sharing deal, Islamabad could start to rebuild better ties with Kabul.

Pakistan could finally end its dual-track policy towards the Taliban - treating some as allies, and others as threats. The military could finally develop a comprehensive strategy towards terrorism and extremism rather than playing favourites with the Taliban. Multilateral action could bring about the first positive geopolitical change in the region since September 11, which would deal with all the Taliban groupings, stabilise both Pakistan and Afghanistan, and allow US forces a peaceful exit from Afghanistan.

Both Pakistan and Afghanistan desperately need a new narrative of peace and accommodation, rather than hostility and using the Taliban as proxy warriors. At the same time, the US needs to end the civil war in Afghanistan before it fully withdraws, and that requires Pakistan's assistance. The next US president will have to make negotiations with the Afghan Taliban a number-one strategic priority despite opposition from the US military, which wants to fight until the last day of 2014.

The attack on Malala has generated unprecedented public energy and a yearning for peace in both Pakistan and Afghanistan. Trying to kill a 14-year-old schoolgirl, and accusing her of being anti-Islamic, has done more to expose the negativity of the Taliban ideology than a dozen suicide bombings.

Yet both countries lack decisive leadership to deal with the worsening regional crisis or to take advantage of such moments as this one. Both Mr Zardari and Mr Karzai have short term aims to politically survive rather than grasp the opportunities for peace which seldom come and quickly vanish. There is a moment now with the window open but it will quickly close.

Ahmed Rashid is a Pakistani journalist based in Lahore. His latest book is Pakistan on the Brink

Online: www.ahmedrashid.com

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3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

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Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

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10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

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The index highlighted fundamental issues for all 34 countries, such as a rapid ageing population and a low growth / low interest environment putting pressure on expected returns. It also highlighted the increasing popularity around the world of defined contribution schemes.

“Average life expectancy has been increasing by about three years every 10 years. Someone born in 1947 is expected to live until 85 whereas someone born in 2007 is expected to live to 103,” Mr Abukhater told the Mena Pensions Conference.

“Are our systems equipped to handle these kind of life expectancies in the future? If so many people retire at 60, they are going to be in retirement for 43 years – so we need to adapt our retirement age to our changing life expectancy.”

Saudi Arabia came in the middle of Mercer’s ranking with a score of 58.9. The report said the country's index could be raised by improving the minimum level of support for the poorest aged individuals and increasing the labour force participation rate at older ages as life expectancies rise.

Mr Abukhater said the challenges of an ageing population, increased life expectancy and some individuals relying solely on their government for financial support in their retirement years will put the system under strain.

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