ISLAMABAD: Pakistan’s government, struggling to lift revenues and cut ballooning public debt, registered around 100,000 new tax filers and expects to have raised about $450 million from a tax amnesty on hidden assets, the finance chief said on Thursday.
The announcement came a day after the International Monetary Fund gave final approval to a $6 billion loan package designed to shore up the economy while the government cuts debt and builds up dwindling foreign currency reserves.
Finance chief Abdul Hafeez Shaikh said nearly 137,000 people had registered at the closure of the amnesty this week, of whom nearly 100,000 were first-time filers.
That was a significant total in a nation where less than 1% of the 208 million population file tax returns.
In total, around 3 trillion rupees ($19.25 billion) of assets were declared and tax revenue worth around 70 billion rupees ($449.15 million) was collected.
Prime Minister Imran Khan introduced the amnesty on undeclared assets, part of a broader drive to widen Pakistan’s notoriously narrow tax base, in a bid to identify high earners for more efficient tax collection.
The move represented a turnaround for Khan who had accused previous governments of using amnesties to legitimize illegally acquired wealth hidden inside Pakistan and abroad.
Under the IMF agreement, approved on Wednesday, Pakistan has undertaken to drastically increase revenue mobilization by 4-5% of GDP at federal and provincial level over three years.
There have already been protests by opposition parties at the squeeze on household revenues.
Hafeez Shaikh said the IMF agreement would open up more funds from other lending agencies and help the broader economy.
“Pakistan’s economy will stabilize, and we will take on the path of progress,” he said.
The government has set a target of raising 5.55 trillion rupees ($35.6 billion) in tax this year, an ambitious goal given that it missed a previous target of 4.4 trillion Pakistani rupees ($28.2 billion) by over 500 billion rupees ($3.2 billion).
Pakistan amnesty scheme draws 100,000 new tax filers, $450 million
Pakistan amnesty scheme draws 100,000 new tax filers, $450 million
- Nearly 137,000 people had registered at the closure of the programme this week
- Around $19.25 billion assets declared, $449.15 million tax revenue collected
Pakistan opens real-time digital payment system to exchange companies as reserves edge up
- Raast enables low-cost transfers between banks, microfinance firms and electronic money wallets
- Pakistan’s overall foreign reserves stand at $21.25 billion as central bank holdings rise $16 million
KARACHI: Pakistan’s central bank on Thursday allowed exchange companies to route home remittances through its instant payment system, Raast, saying the move aims to promote digital transactions and improve the efficiency of inflows, as the country’s foreign exchange reserves rose modestly in the latest week.
The State Bank of Pakistan (SBP) said in a statement that the country's total liquid foreign reserves stood at $21.25 billion as of Jan. 9, while the central bank’s own reserves rose $16 million to $16.07 billion.
The statement said the decision to extend Raast to exchange companies forms part of the central bank’s broader push to strengthen digital payments infrastructure and support a shift toward a cashless economy.
“Building an innovative and inclusive digital financial services ecosystem is one of the key objectives of State Bank of Pakistan under its Strategic Plan 2023-2028,” the SBP said.
“In furtherance of this vision, SBP has now allowed Exchange Companies (ECs) to utilize ‘Raast,’ a state-of-the-art payment system launched by SBP in 2021, to facilitate remitters and beneficiaries of home remittances,” it added.
Raast, a real-time digital payment system, allows instant and low-cost transfers between banks, microfinance institutions and electronic money wallets.
“Through this enablement, the beneficiaries receiving remittances through ECs can receive their funds in their accounts and wallets ... in a safe and efficient manner,” the statement said.
Pakistan relies heavily on workers’ remittances from abroad and has been seeking to channel more inflows through formal banking systems by strengthening digital and regulated payment networks, as authorities try to curb informal mechanisms such as hawala and hundi, underground value transfer systems that move money outside the banking sector.
