The federal government has pledged to withdraw 16 percent Federal Excise Duty (FED) imposed on exchange companies. A delegation of Exchange Companies met Finance Minister Ishaq Dar and Haroon Akhtar, Advisor to Prime Minister on Revenue, on Friday to discuss FED and other issues being faced by the companies. The delegation was led by Sheikh Alloudin, President, Exchange Companies Association of Pakistan (ECAP).
Zafar Paracha, General Secretary, ECAP told Business Recorder Saturday that the Finance Minister has also pledged to announce some incentives in the next budget 2016-17 to facilitate exchange companies and to curb Hundi/Hawala and enhance inflows of home remittances through legal channel.
He said that with the decision of FED withdrawal, Pak rupee has slightly appreciated in the open currency market and the dollar was being traded at Rs 105.60 in the open market on Saturday. Paracha said for the last few months, exchange companies have been requesting federal government for withdrawal of FED and now the minister has assured to withdraw FED notices issued earlier this month by the Federal Board of Revenue (FBR).
Malik Bostan, President, Forex Association of Pakistan (FAP), said after issuance of these notices panic was created in the market and the dollar gained against the Pak rupee in the open market. As the minister has announced to withdraw these notices, the dollar demand in the open market has decreased significantly, he added.
He said exchange companies can bring more foreign exchange and home remittances, besides creating 20,000 new job opportunities, if the government allows entering agreement with 400 international money transfer companies. "We assured to bring some $10 billion annually compared to $5 billion presently with the approval of agreement with foreign money transfer companies," he added. He said exchange companies have surrendered some $10 billion in the interbank market during last six year.