ISLAMABAD: The Pakistani government is struggling to regulate millions of dollars of informal gold business in the country by bringing jewelers into the tax net to fulfil one of the conditions of the Financial Action Task Force, officials said on Wednesday.
The global financial watchdog placed the country on its grey list in June 2018 for deficiencies in its system to counter practices like terror financing and money laundering.
Since then, Pakistan has largely addressed 26 out of 27 items on the action plan it first committed to after being placed on the list.
The FATF has been pressing Pakistan to regulate all its businesses and economy to minimize chances of money laundering and terror financing through informal sectors like gold business and prize bonds.
The country has already restricted the buying and selling of the bonds in unconventional ways and now turned its eye toward the gold business.
“It [the gold] is one of the most unregulated sectors that need to be regulated. A directorate-general has been constituted for this purpose,” Syed Nadeem Hussain Rizvi, a Federal Board of Revenue (FBR) member, told Arab News on Wednesday.
He said the directorate-general was working on a regulation mechanism to make the gold business part of the country’s formal economy.
“The FATF is concerned about regulation of such businesses,” he added.
Jewelers and gold businessmen have been resisting the FBR decision to document the sector, saying it would lead to their harassment and curtailment of the business unless the government made a more holistic effort to digitize the overall economy.
President of All Sindh Sarrafa Jewelers Association Haroon Rasheed Chand said he had called a meeting of goldsmiths and jewelers on Friday to discuss the issue.
“We have been regularly paying all income and sales taxes, but even then we are harassed in the name of informal business,” he said while talking to Arab News.
Chand maintained different government agencies were forcing the jewelers to reveal their gold and jewel transactions worth Rs2 million or more, “creating panic in the market.”
“We are ready to cooperate with the government in its efforts to remove its name from the FATF grey list, but the authorities should not force small gold shops to register for sales tax because this will adversely impact their business,” he added.
Economists and experts believe that black money worth millions of rupees can be easily converted into gold and prize bonds and kept anywhere without legal ownership. They said the government agencies could not determine the ownership of gold and jewelry due to loopholes in the current legal system and mechanisms.
“The government will face resistance from the informal sector, but it should go ahead with its plan to document the economy and register all jewelers and gold businessmen,” Syed Atif Zafar, chief economist at the Topline Securities, told Arab News.
He said the country had already tried to document the real estate sector and stock market.
“The government has taken a good initiative, though it will take some time to materialize,” Zafar added. “The documentation of the gold sector is not just important to fulfill the FATF condition but also to increase the country’s tax base.”
Pakistan struggles to regulate informal gold business to fulfill FATF conditions
https://arab.news/4g2pw
Pakistan struggles to regulate informal gold business to fulfill FATF conditions
- The country’s Federal Board of Revenue has set up a body to regulate gold business by bringing jewelers into the tax net
- An association of goldsmiths says its members are willing to cooperate with the government, but they should not be harassed in the name of regulating the sector
Pakistan okays Bangladesh’s Biman to begin Dhaka-Karachi flights as ties warm up
- Pakistan and Bangladesh were once one nation, but they split in 1971 as a result of a bloody civil war
- Ties between both nations have warmed up since ouster of PM Sheikh Hasina, viewed as an India ally
ISLAMABAD: Pakistan has granted Bangladesh’s national carrier, Biman Bangladesh Airlines, permission to begin flight operations between Dhaka and Karachi, the Pakistan Civil Aviation Authority (PCAA) said on Friday, amid strengthening ties between the two countries.
Pakistan and Bangladesh used to be one nation, but they split in 1971 as a result of a bloody civil war, which saw the part previously referred to as East Pakistan seceding to form the independent nation of Bangladesh.
Ties between Pakistan and Bangladesh have warmed up since the fall of former Bangladeshi prime minister Sheikh Hasina, who was widely viewed as close to India and critical of Pakistan, following a student-led uprising in August 2024.
Islamabad has attempted to forge closer ties with Dhaka in recent months after the two South Asian nations began sea trade in late 2024, which were followed by efforts to expand government-to-government commerce.
“Pakistan has granted Biman, the national flag carrier of Bangladesh, initial permission for three months up to March 26 to operate flights between Dhaka and Karachi,” a PCAA spokesperson told Arab News, adding that the duration could be extended.
The approval marks a significant step in restoring direct air connectivity between the two nations.
In Nov. last year, the now-privatized Pakistan International Airlines (PIA) said it had signed a cargo agreement with Biman, aimed at streamlining air freight operations and boosting bilateral trade.
A PIA spokesperson said the agreement was part of PIA’s strategy to expand its cargo business and offer more competitive services to customers.
Pakistan has stepped up efforts to rebuild relations with Bangladesh as ties between Dhaka and New Delhi remain strained over India’s decision to grant asylum to Hasina after she fled the country.
In Feb. 2025, a cargo vessel sailed directly from Pakistan to Bangladesh for the first time in decades and successfully unloaded containers, port officials said.
The two countries signed six agreements last August, covering areas such as visa exemptions for diplomatic and official passport holders, trade cooperation, media collaboration and cultural exchanges, officials said.
Separately, Islamabad allowed Britain’s Norse Atlantic to operate flights to the South Asian country, the Pakistani defense minister announced late Thursday. The airline will operate direct flights from London, Manchester and Birmingham to the Pakistani capital of Islamabad.
“The increase in operations of international airlines to Pakistan will promote a competitive environment leading to world class service and balance in fares,” Defense Minister Khawaja Asif said on X.
