Staff Reporter
Islamabad
The remittances from overseas Pakistanis are expected to reach to $20-$21 billion during the current fiscal year (2019-20), the Finance Ministry said on Tuesday.
According to statement issued here Tuesday, the measures, announced by the government recently to boost remittances, paid off as the money remitted by overseas Pakistanis touched $17 billion figure during the first nine months of the current fiscal year (Jul-Mar, FY2020) against $16 billion last year, registering a growth of 6.2 per cent.
“This trend shows that apprehensions and estimates as reported recently in the media with regard to estimates of the World Bank that there would be no inflows of remittances from March onwards, are highly unrealistic and on the basis of current trend in remittances and estimated COVID-19 impact. The figure of remittances inflows is expected to reach US $ 20- US $ 21 billion during the current fiscal year,” the statement added.
The Finance Division noted that in order to encourage and facilitate the overseas Pakistanis to send their remittances through official banking channels, various initiatives had already been taken by the government. According to the statement under these initiatives, the prevailing rate of TT (Telegraphic Transfer) charges had been enhanced from SAR 10 to SAR 20 for transactions between USD 100-200. It would cost an additional amount of Rs. three billion to the government.
The existing incentive scheme for the marketing of home remittances i.e PKR 01 against USD 01 of remittance amount beyond 15 per cent growth over last year may now be based on tiered growth i.e., Rs.0.50 on 5 per cent growth, Rs.0.75 on 10 per cent growth and Rs.01 on 15 per cent growth. It would cost an additional Rs.600 million to the government.
To leverage home remittance customers and encourage them to use banking channels, withholding tax would be exempted from Jul 01, 2020 on cash withdrawal or on issuance of banking instruments/transfers from a domestic bank account to the extent of remittances amount received from abroad in that account in a year. According to the statement, FBR had been requested for amendment in Income Tax ordinance through finance bill.
A ‘National Remittance Loyalty Program’ would be launched from September 01, 2020 with collaboration of major commercial banks and government agencies through which various incentives would be given to remitters through mobile apps and cards. The initiatives also include the provision of the Technical Supplementary Grant of Rs.9.65 billion to reduce the lag time from 12 to 6 months in reimbursement of T.T charges to banks on home remittances.
