Public office & public accountability—IV Who finances the mandate

Scrutiny of personal wealth must be connected with party accounts, campaign spending and the financial interests affected by public decisions

A declaration may accurately record a politician’s house, bank balance and liabilities while revealing very little about the money that sustains his political career. Someone pays for transport, offices, advertising and the organisation that keeps a candidate visible. Citizens are entitled to know whose money helps obtain public power and whether public decisions later reward that support.

Our 2016 proposal for parliamentary accountability placed party finance alongside legislators’ declarations. That connection remains essential. Personal tax compliance cannot certify the integrity of a political organisation, and an audited party account cannot explain every member’s private wealth. Effective scrutiny must examine both, then investigate relevant connections through lawful procedures.

The statutory references need updating. The Elections Act, 2017 now supplies the principal framework. Section 204 regulates membership fees, contributions and donations, including prohibited sources.

Section 210 of the Elections Act, 2017 requires audited consolidated party accounts and the prescribed certification. Section 211 addresses campaign finance information. Discussion of contemporary obligations should begin here rather than presenting the Political Parties Rules, 2002 as the current starting point.

These requirements recognise that political finance includes more than the cheque handed to a party treasurer. Cash, facilities and support in kind can all sustain a campaign. The practical challenge is to ensure that the accounts capture the support which the law requires to be recorded, including spending channelled through arrangements designed to obscure the person who ultimately provided it.

The Election Commission of Pakistan (ECP) should publish a clear annual account of compliance and scrutiny. Which parties filed? Were their statements complete? Which accounts required further explanation, and what happened afterwards? A public archive should allow the same party’s accounts to be compared across years. Publication should make the records usable, with dates and revisions preserved, rather than requiring a researcher to reconstruct a financial history from scattered files.

Independent audit is necessary, but it cannot carry the entire burden of public regulation. An auditor examines information and obtains assurance within an agreed legal framework. The regulator must still test prohibited funding, reporting completeness and compliance with election law. Where material evidence emerges from another lawful source, the existence of an audit report should not close the inquiry.

Party receipts should be reconciled with bank records, declared expenditure and the relevant disclosures of candidates. This should be done under clear legal authority, with protection for information outside the legitimate purpose of the examination. Apparent differences may reflect timing, accounting treatment or lawful arrangements. They may also reveal undeclared support. The regulator must establish which is the case before announcing a finding.

Tax obligations require equal precision. Registration as a political party is not a general certificate of exemption from tax law. Its legal status, income, assets and other statutory conditions determine its obligations under the Income Tax Ordinance, 2001. Filing with ECP does not substitute for a tax return where one is required. Conversely, a tax return does not satisfy the separate election-law requirements for party accounts and campaign finance.

We favour an express, uniform requirement that every enlisted political party obtain tax registration and file an annual tax return, even where no tax is payable. That would remove avoidable arguments about coverage and permit consistent reconciliation with electoral accounts. The new duty should apply to every enlisted party, with a common reporting period and a clear route for comparing the two sets of records.

Our earlier suggestion of tax relief for small political donations also deserves reconsideration on its merits. Any such relief would require specific legislation. It should support participation by ordinary citizens, with modest individual limits and verifiable payments, rather than subsidise the purchase of influence. Donor eligibility, public disclosure thresholds and prohibited sources would need to operate together. A donation should never purchase access to a confidential decision-making process.

The most revealing comparison may be between financial interests and public decisions. Does an official hold an interest in an enterprise affected by a decision he is making? Is a contracting company’s beneficial owner connected with a person responsible for awarding the contract? Did a relevant relationship receive proper disclosure and treatment? These questions concern conflicts of interest even where every rupee of income has been taxed.

The 2026 Civil Servants Conduct Rules expressly address conflicts and recusal. Legislatures and other public bodies need equally clear, appropriate procedures within their own constitutional settings. A parliamentary financial-interest register should identify interests relevant to legislative and oversight work. Decisions about disclosure and recusal should be recorded and open to review, rather than left to personal assurances that the official can remain impartial.

A declared financial connection is not evidence that a contract was corrupt or a policy was purchased. Businesses and citizens may lawfully support political activity within the applicable rules. Disclosure supplies information needed to investigate a possible conflict and to judge how it was managed. Treating every donor as a criminal would discourage legitimate participation and encourage less visible channels of support.

The opposite indulgence is more familiar. Influence is treated as an accepted cost of political competition, while the public is asked to finance the consequences through higher taxes or poorer services. Our work on tax directories addressed the credibility lost when those exercising power cannot demonstrate their own financial compliance. Party finance extends that concern to the organisations through which power is obtained.

Public subsidies and benefits should also be visible in political accounts where the law requires their inclusion. Official resources used for official duties must be distinguished from resources diverted to party activity. Transparent records would help protect the public purse and honest officials who refuse improper requests. The purpose is to establish responsibility for a particular expenditure, not to condemn political organisation itself.

Parliament’s proposed disclosure committee should oversee whether these systems work, while ECP retains its constitutional and statutory responsibilities. Verification staff should refer relevant evidence through lawful channels and report whether the receiving authority responded. Parties represented on the committee must not be permitted to bargain away scrutiny of their own accounts.

Compliance should be practical for smaller parties as well. Standard accounting formats, accessible filing facilities and clear guidance would reduce unnecessary cost without diluting the reporting duty. Sanctions should distinguish a remediable filing error from a deliberately concealed prohibited contribution.

Public funding or donation relief, if introduced, should depend on transparent conditions applied evenly. Otherwise, a reform advertised as cleaning political finance could become another advantage for established organisations that can afford expensive compliance teams. The purpose is to allow citizens to organise politically without having to surrender their party to an undisclosed financier.

The financial cost of winning office does not end on polling day. It can shape appointments, regulation and expenditure for years afterwards. A democracy that asks citizens to trust the mandate must let them examine the money supporting it and the interests that public power serves.

[To be continued]

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Huzaima Bukhari, lawyer and author, has been Adjunct Faculty at Lahore University of Management Sciences (LUMS), member Advisory Board and Senior Visiting Fellow of Pakistan Institute of Development Economics (PIDE). She also served Civil Services of Pakistan from 1984 to 2003.

Dr. Ikramul Haq, Advocate Supreme Court, Adjunct Faculty at Lahore University of Management Sciences (LUMS), member Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE), holds an LLD in tax laws. He was full-time journalist from 1979 to 1984 with Viewpoint and Dawn. He also served Civil Services of Pakistan from 1984 to 1996.