Govt incentivises remittances through formal channels

ISLAMABAD: Among a host of measures to encourage overseas Pakistanis to send their remittances through official banking channels, the cabinet’s Economic Coordination Committee (ECC) has approved withholding (WH) tax exemptions beginning July 1 for foreign remittances transferred into bank accounts, as well as the impending launch of a “National Remittance Loyalty Program”.

The approvals were granted at an ECC meeting chaired by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh on Wednesday. Several measures were approved for the enhancement of home remittances through banking channels.

The “National Remittance Loyalty Program” will be launched on September 1 with the collaboration of major commercial banks and government agencies, through which various incentives will be given to remitters through mobile apps and cards.

It also approved the continuation of the New Scheme of incentives launched in 2018-19 for banks and exchange companies during the current calendar year from January 2020. As per the scheme, financial institutions would be incentivised Rs0.50 per 1 USD on 5 per cent growth, Rs0.75 per 1 USD on 10 per cent growth and Rs 1 per 1 USD on 15 per cent growth.

The ECC approved a technical supplementary grant of Rs9.6 billion during the current financial year to finance these initiatives.