ISLAMABAD: Exchange Companies Association of Pakistan (ECAP) Chairman Malik Bostan Wednesday suggested to the Senate Standing Committee on Finance to remove the condition of the Computerised National Identity Card numbers and videos of buyers/sellers of foreign exchange up to US$15,000.
Bostan made detailed recommendations to the committee to improve the dollar situation in the country.
He claimed that the exchange companies provide monthly US$300 million to US$400 million and annually US$4 billion to the government through commercial banks. If the government gives permission of seeking dollars from overseas Pakistanis through the direct swap policy, the exchange companies can arrange up to US$12 billion per year.
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Exchange companies have provided around US$4 billion to the present government during April 2022 to March 2023.
He further recommended that the exchange companies be permitted home delivery facility to compete with the Hawala/Hundi business. They can take the biometric device to the door step of the buyers and sellers to fulfil requirements of the State Bank of Pakistan (SBP). The system is Hawala/Hundi is improving day by day and we need to compete with this informal economy. If the exchange companies provide facilities at the doorstep of the buyers and sellers, people will prefer to carry out transactions through the exchange companies.
“One-time permission should be given to the accountholders to deposit cash foreign currency in their bank accounts without asking source of the foreign exchange. We can easily generate US$2-4 billion by giving this permission to the accountholders,” he suggested.
He apprehended that the amnesty schemes are not allowed by the International Monetary Fund (IMF), but the permission can easily generate huge amount of foreign exchange in the country.
He briefed the committee that the know your costumer (KYC) should be done for the buyers/sellers of foreign exchange, but the State Bank of Pakistan (SBP) should remove the restriction of making videos or submitting CNICs of the buyers/sellers of foreign exchange.
The association discussed various recommendations and assured that if policies are revised and restrictions are given relaxation by keeping in view the current economic situation of the country, dollar stability can be achieved.
He said that Pakistan is an economically stable country if the focus is given on agriculture and natural resources. He said that it does not require an IMF deal. In its recommendations, stress was given on cease of Afghan Transit and allowing deposits up to 15,000 dollars without verification. The exchange companies association claimed that they bought four billion dollars in the country last year and has the capacity to bring one million dollar every month.
He suggested that the exchange companies and overseas Pakistani should be given the status of export industry to compete with the black market as well as Hawala and Hundi.
ECAP Chairman stated that the multiple taxation is creating serious problems for the exchange companies and Federal Board of Revenue (FBR) must resolve the issue of sales tax/Federal Excise Duty on the exchange companies.
He suggested that rewards of 20-25 percent should be given to the officials who intercept cases of border smuggling, especially at the Pak-Afghan border.
He said that there is no shortage of foreign exchange in the country, but the market cannot be regulated by force. There is a need to give free hand to the exchange companies.
Malik Bostan stated that the FATF compliance of the foreign exchange companies in Pakistan is the best in the world. He suggested that the government should provide incentives to freelancers to bring their US$2 billion into the country.
Copyright Business Recorder, 2023