Govt urged to offer amnesty scheme for undeclared FX

LCCI proposes financial benefits for declaring foreign currency and deposit in banks

LAHORE:

In a bid to bolster the country’s economy, the President of Lahore Chamber of Commerce and Industries (LCCI), Kashif Anwar, has called on the Pakistani government to introduce an amnesty scheme for individuals holding undeclared foreign exchange. Anwar believes that this initiative could potentially inject up to $12 billion into the national economy. He emphasizes that the government must convince international bodies such as the International Monetary Fund (IMF) and the Financial Action Task Force (FATF) of the positive impact this move would have on the nation’s financial health.

In an interview with The Express Tribune, Anwar stated, “We need to save our country at this moment. The economic managers must announce financial benefits for those who declare their foreign exchange reserves and deposit the money for a fixed term of a couple of years.” He stressed that the amnesty scheme is urgently required to bring undeclared foreign exchange into the formal economy.

The LCCI president acknowledged that previous amnesty schemes failed to yield desired results due to certain clauses that created panic among individuals with hidden assets. To instil trust, the government must guarantee the safety of the declared funds, similar to the deposits made by Saudi Arabia. Anwar pointed out that the entire business community is unified in their concern over the prolonged economic crisis. “Business communities do not have any political party; their party is the economy, and our economy is in bad shape due to restrictions on imports,” he explained.

Reflecting on the challenges faced by Pakistan in recent years, Anwar highlighted the COVID-19 pandemic, devastating floods that cost the economy $30 billion, and the free-floating exchange rate as major setbacks. He emphasised that the government must now focus on stabilising the currency before addressing issues such as import substitution. Anwar urged the government to prioritise essential imports and differentiate between raw materials, machinery, and finished goods. He stressed that importing finished goods negatively impacts the country’s economic health.

Furthermore, Anwar suggested that if Pakistan is unable to export finished goods, the country should explore opportunities for exporting its manpower to boost remittances and foreign exchange reserves. “Industrialisation is essential for our survival as a nation,” he asserted, underscoring the need for systemic reforms and a greater emphasis on industrial growth.

The LCCI president also called for a shift in focus, advocating for prioritising imports over exports. He proposed curbing unnecessary imports, promoting import substitution, and reducing import duties to facilitate the importation of affordable raw materials. Anwar emphasised that as an import-dependent economy, these measures should be given the highest priority.

Published in The Express Tribune, June 2^nd, 2023.

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