Incentives to boost remittances

Published March 5, 2020
The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved further incentives for banks and facilitations to the overseas Pakistan to boost remittances through the formal channels. — AFP/File
The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved further incentives for banks and facilitations to the overseas Pakistan to boost remittances through the formal channels. — AFP/File

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved further incentives for banks and facilitations to the overseas Pakistan to boost remittances through the formal channels.

The meeting presided over by Finance Adviser Dr Abdul Hafeez considered a set of proposals to encourage overseas Pakistanis to send their remittances through official banking channels.

It was decided to increase the rebate on reimbursement of telephonic transfer charges to 20 Saudi rials from 10 on transactions between $100-200. It also allowed the continuation of the new scheme of incentives launched in 2018-19 for banks and exchange companies during the ongoing calendar year from January.

As per this scheme, financial institutions would be incentivised at the rate of 50-paisa per US dollar on 5pc growth, 75-paisa per dollar on 10pc growth and Re1 per dollar on 15pc growth.

The amount of remittances transferred into bank accounts will be exempted from withholding tax with effect from July 1. Also, a “National Remittance Loyalty Programme” will be launched from Sept 1 with collaboration of major commercial banks and government agencies through which various incentives will be given to remitters through mobile apps and cards.

The ECC also approved a technical supplementary grant of Rs9.6 billion during this fiscal year to finance the above mentioned initiatives.

It further deliberated upon a proposal by the Ministry of Energy to extend till June the grant of subsidy to agricultural tubewell consumers in Balochistan. The ECC was briefed that nearly 30,000 agri consumers in the province had been given subsidy since January 1, 2015 with 40pc of that amount coming from the centre while the remaining 60pc from the provincial government.

However, the recovery of dues from farmers for the electricity consumed over and above the limit of subsidy had been negligible and attempts to recover these dues from defaulters in the past had not been successful and led to law and order situations.

The ECC discussed the issue in detail and set up a committee, including the power minister to discuss the issue with the Balochistan government to ensure a credible solution to the problems impeding a judicious execution of the scheme for which the centre alone was contributing Rs9bn annually.

In the meantime, the meeting allowed the extension of subsidy until a solution to the issue was found by the newly constituted committee.

The ECC approved a proposal by the Ministry of Federal Education & Professional Training for a technical supplementary grant of Rs5bn to the Higher Education Commission for 2019-20 with instruction for a judicious and need-based distribution of funds among the universities.

Published in Dawn, March 5th, 2020

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