KARACHI: Exchange Companies of Pakistan (ECAP) Chairman Malik Muhammad Bostan Thursday suggested early imposition of 10 percent tax on shopping abroad and on online shopping of luxury items through debit and credit cards.
He said with the State Bank of Pakistan’s decision that allows banks to purchase US dollars from interbank for settlement of card-based cross border truncations with International Payment Schemes (IPSs), has a positive impact on the market and on Thursday Pak rupee recovered against the dollar. Free market rate has reduced from Rs315 to Rs290 in a single day due to the SBP’s decision, he added.
“I personally called Finance Minister Ishaq Dar and SBP Governor Jameel Ahmed and congratulated them on this decision’’ he added.
He said Hajj pilgrims will be major beneficiaries of this move as the Saudi riyal rate will also reduce in the free market followed by US dollar. Previously, the Saudi riyal exchange rate rose to Rs 84 from Rs 78 due to high dollar rate.
In order to maintain this rate, Bostan has suggested to the Finance Minister to immediately impose a 10 percent tax on online shopping of luxury and non-essential items or shopping abroad through credit or debit cards.
Previously, banks were buying dollars from exchange companies at higher rates for settlement of card-based cross border truncations with IPSs. Now they will get some relief in terms of a low interbank rate compared to the open currency market, he added.
People used to make payments to commercial banks by buying 10 percent expensive dollars, now they will get dollar at Rs 285 instead of Rs 315 rupees from the open currency market, he maintained.
At present, commercial banks have issued around 50 million credit and debit cards and if they find out that they can get dollars at 10 percent cheaper through credit cards, the referral operator and black marketers will make payments through credit cards, he cautioned.
He has also appealed to the people that for the sake of Pakistan not to buy unnecessary goods or shopping abroad through bank cards. ‘‘Currently, the country needs every dollar and without the support of the nation, the government cannot improve the economy’’, he added.
Bostan also appreciated the government’s efforts for restoration of the IMF program to get the next tranche of one billion dollars. He said that soon Pakistan will get an IMF loan tranche, after which friendly countries will also give $23 billion to Pakistan. With the arrival of these pledged inflows, the dollar rate will drop drastically, he maintained.
He has also suggested to Dar that if the government wants to eliminate Hundi/Hawala remittance and black market, then when the government not only arrests the remittance operator but also sender and purchaser should be punished.
According to Bostan, Finance Minister Ishaq Dar has promised that the action will also be taken against those who send illegal money.
Copyright Business Recorder, 2023