ACCORDING to news reports, the government plans to encourage remittances by overseas Pakistanis through official channels. The proposal is to allow the import of duty-free electric vehicles of up to 3000cc to expatriates who remit $100,000 over two years. The scheme has many lacunae.

First: such a scheme would be vulnerable to misuse. In the 1970s, the then government introduced a gift scheme where every overseas Pakistani could bring or send a vehicle as a gift to parents. This scheme was grossly misused.

Second: a person who sends $50,000 a year back home must be very well-off. The government should give incentives to such individuals to import duty free machinery to set up small- or medium-sized industry.

In this respect there is immense potential in food processing, small manufacturing, agri-business and cottage industries. Allowing a tax-free import of machinery and equipment for small to medium business can provide the desired incentive to those who remit money to Pakistan, but also help strengthen the economy.

This exercise would generate employment and produce products that we currently import further lessening import bills.

Raja Shafaatullah
Islamabad

Published in Dawn, December 6th, 2019