Pakistan bars leaders & officials from receiving gifts valued over $300 amid Toshakhana controversy

The Toshakhana department was set up in 1974 to keep the gifts given to rulers and officials by heads of other governments and states and foreign dignitaries

Pakistan has introduced new rules barring the prime minister, ministers and officials from retaining any gift by a foreign government whose value exceeded $300 amid entrenched corruption related to state gifts, it emerged on Tuesday.

The issue made headlines after former premier Imran Khan sold a precious watch given to him by the Saudi crown prince and did not disclose its sale to the Election Commission of Pakistan for which he was disqualified last year and a criminal case was launched. Authorities are in Lahore to arrest Khan in the case.

The Cabinet formulated a new policy about the Toshakhana (state depository) after an official document showed that between 2002 and 2022 hundreds of expensive gifts had been retained by successive top state functionaries after paying just paltry payments.

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They apparently got the benefit of a rule that allowed them to retain any gift after paying 20 per cent of its value.

The ‘Toshakhana Procedure for the Acceptance and Disposal of Gifts, 2023’ approved on March 8, includes a fresh set of guidelines that all gifts of more than $300 value must be deposited in Toshakhana as state property.

“Gift(s) valuing up to $300 shall be allowed to be retained by the recipient after due payments as per its assessed market value,” the new ruler stated.

“The gift(s) exceeding this monetary limit shall straightaway become state/Toshakhana property to be deposited and disposed of according to Toshakhana Procedure.”

The exception to antiques and gifts of historical value that are to be displayed in government buildings.

The policy says all gifts, irrespective of their price, received by government functionaries must be “reported” and “deposited” in Toshkhana within “30 days of receipt of the gifts” or “30 days from the date of return to Pakistan in case of foreign visit”, otherwise action would be taken.

However, the new policy has shown leniency toward gifts of perishable items that can be retained “without reporting or depositing” them.

It has also prohibited any government functionary “except those in BPS 1 to BPS 4” from receiving cash awards as gifts.

Lower state functionaries like gardeners, watchmen, office boys and peons come under BPS 1 to BPS 4 category.

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“Such gifts may be politely refused. In case, it becomes impossible to refuse without causing offence to the visiting dignitary, the amount shall be immediately deposited in the government treasury and a copy of the treasury challan shall be provided to the Toshakhana Incharge, Cabinet Division.”

The new policy has also prohibited government functionaries from receiving gifts for their spouses or members of their families. However, if the gift cannot be declined due to any reason, it must be deposited with the Toshakhana immediately.

“Such gifts received by the president/head of the government for their person or their family members shall be deposited in Toshakhana for determination of assessed market value, retention cost, and further disposal as per Toshakhana Procedure. These instructions do not apply to gifts and donations made to institutions.”

Animals received as gifts will be transferred to the nearest Remount Veterinary and Farms Corps for early sale or handed over to the Zoological Garden.

“Gold and Silver bullions shall be sent to the State Bank of Pakistan - Mint,” it said.

Antiques will be placed in the museums or displayed in official government buildings whereas “vehicles shall be given to the Central Pool of Cars of the Cabinet Division.”

The policy stated how the value of the gifts would be determined and who should be responsible to report the gifts received by functionaries. The gifts that cannot be retained, donated, or displayed shall be publicly auctioned once or twice a year.

The Toshakhana department was set up in 1974 to keep the gifts given to rulers, parliamentarians, bureaucrats, and officials by heads of other governments and states and foreign dignitaries.

Meanwhile, the Lahore High Court hearing a separate case about who benefited from the Toshakhana asked the government to provide the complete list of gifts received by every official since 1947.

So far, the government has shared a list from 2002 to 2022, showing that every single ruler and various officials since 2002 retained various gifts after paying 20 per cent of their value.