Lahore, September 25, 2024 – The Pakistan Institute of Legislative Development and Transparency (PILDAT) conducted a briefing session with representatives of the media on Wednesday to launch its issue paper “State of Political Finance in Pakistan,” which proposes reforms for strengthening the political finance regulatory framework in the country.
The session began with welcome remarks by Mr. Ahmed Bilal Mehboob, who highlighted the importance of accountability and transparency in political finance for any democratic country. Ms. Alena Sadiq from PILDAT then gave an in-depth presentation, where she explained the current rules and regulations governing political finance as outlined in the Elections Act, 2017. Subsequently, she highlighted the gaps and ambiguities in the current regulatory framework for electoral finance. While strict legal spending caps exist for candidates’ expenditures during elections, Section 132 (5) allows for a way around the limits by allowing third parties to spend money on behalf of a candidate “without the consent” of the candidate. Moreover, while candidates are required to report expenditures, they are not required to report the identity of donors. The law is also particularly vague when it comes to the disclosure of political parties’ election expenditures. While Section 211(2) mandates the submission of political parties’ election expenses, it does not specify a reporting deadline or require public disclosure.
The presentation further touched upon non-electoral political finance, including the permitted and prohibited sources of funding for political parties. A Gazette notification by the ECP, dated January 21, 2023, disclosed that 271 representatives from the Senate, National, and Provincial Assemblies had failed to submit their Form B within the stipulated time frame. Furthermore, according to the ECP’s Annual Report 2023, 168 registered political parties were required to submit their statement of accounts for the financial year 2022-2023, but only 107 parties complied by the due date, while 40 out of 59 parties submitted after being issued show-cause notices for non-compliance.
The briefing also included a comparative analysis with South Asian countries, providing insights into how Pakistan can incorporate regional best practices to strengthen its political finance system. While India limits corporate donations to not more than 7.5% of a corporation’s average net profits from the previous 3 fiscal years, Pakistan has no such limits on donor contributions for either natural or legal persons. Additionally, Sri Lanka allows public financing of political parties, where recognized political parties are eligible for state funding if they have received at least one percent of the valid votes polled in the last General Election.
To conclude, Mr. Mehboob put forth PILDAT’s key recommendations for improving the state of political finance in Pakistan:
- The term ‘source of funds’ should be elaborated upon in the Elections Act, 2017, as defined in Article 17 (3) of the Constitution.
- The enforcement of political finance laws should be improved through extensive monitoring mechanisms.
- The audit and accounts personnel within the Political Finance Wing should undergo rigorous training.
- Investments should be made in technology and data management systems.
- A set percentage of political finance records, obtained from political parties and individuals, should be chosen at random for inspection regularly.
Following the presentation, members of the media fraternity asked questions about the laws and regulations, and also shared their own views on various aspects of political finance. Mr. Iftikhar Ahmed from Samaa News questioned whether the suspension of membership upon non-compliance of political finance regulations is an effective deterrent. Mr. Salman Ghani from Dunya News raised the issue of determining foreign funding, particularly in the case of donations from overseas Pakistanis. Members of the media also inquired about potential legislative changes that could enhance political finance regulations in Pakistan and the role that independent regulatory bodies could play in this process. Mr. Ahmed Bilal Mehboob emphasized that while the current laws in Pakistan are extensive, there is a pressing need for greater clarity and stronger enforcement. The discussion also touched upon party funds, and whether these are transparently disclosed through proper channels or if actual funding exceeds the reported amounts.
The participants of the briefing session agreed on the need for strengthening regulations as well as enforcement mechanisms to improve the regulatory frameworks for electoral and non-electoral political finance in Pakistan.
The full report can be read here: English | Urdu