Amnesty's success to help stabilize exchange rate: Bostan

Forex Association of Pakistan (FAP) President Malik Bostan Saturday said successful amnesty scheme will help stabilize the exchange rate in the open currency market. Commenting on the amnesty scheme, he said the amnesty scheme is a good opportunity for those Pakistanis, who have hidden assets in the country or abroad. "With the approval of the scheme all doubts about the amnesty scheme have been cleared and now Pakistanis can avail this scheme without any hesitation," he added.
He said that 2 percent tax on declaration of foreign assets and 5 percent tax on domestic assets is not an expensive deal and people should avail this opportunity to regularize/legalize their assets. Bostan said Pakistan has already signed and ratified the Economic Cooperation and Development's Multilateral Convention on Mutual Administrative Assistance in tax matters. Under the convention, Pakistan can seek information on banking and other details of Pakistani residents from other countries, which are part of this convention.
Therefore, in this situation, when Pakistan can get information from other countries, Pakistanis have a respectable opportunity to declare their assets and come into the tax net, he added. "After the change in international rules it has become difficult for hiding assets abroad and the assets of Pakistanis abroad could be confiscated, if they fail to avail this amnesty scheme," he said.
This scheme will not only favor Pakistanis but also help the Federal Board of Revenue to generate more revenue and broaden the tax net, President FAP said. He said presently, the country's external account is under pressure and looking for foreign inflows to finance the rising current account deficit and foreign debt obligations. The reserves held by State Bank of Pakistan (SBP) have already reached below the $11 billion mark. In this situation, the amnesty scheme will help bring more foreign inflows, he added.
Bostan said dollar demand in the open currency market has reduced and now the market has surplus dollar. Daily demand of the greenback in open currency market has declined from 3 million dollars to 1.5 to 2 million dollars per day. Exchange rate in open currency market will further improve in coming day as presently there is demand for Hajj and Umrah. He said present steps taken by the government in the budget will help document the economy; however, these initiatives should be implemented phase-wise to avoid crisis and panic-like situations.