Inflow: Remittances surge to all-time high
Remittances jumped 40 per cent to reach a record high of $1,310.5 million in August against $933.06 million in the same month last year, according to a statement released by the State Bank of Pakistan on Monday.
The previous highest amount remitted in a single month was recorded in June when it stood at $1,104.56 million.
This was the sixth consecutive month when remittances stood at more than $1 billion.
The State Bank of Pakistan, Ministry of Finance and Ministry of Overseas Pakistanis initiative ‘Pakistan Remittance Initiative’ has shown remarkable progress as remittances through formal channels have beaten all previous records, adds the statement.
In August 2011, the inflow of remittances from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounted to $309.79 million, $294.46 million, $263.58 million, $163.90 million, $134.31 million and $42.38 million, respectively.
Published in The Express Tribune, September 13th, 2011.
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When imports are made from the money stored already in foreign banks possibly from past exports the tax system has limited control except to apply small import duty. The real money a country need is foreign exchange which comes large exports of services and goods and from remittances the Overseas Pakistanis regularly make. Due to the exorbitant inflation the relatives in Pakistan are asking for more money from their overseas donors and so more money is coming in( unfortunately that again result in inflation due to the flooding of unearned(no one in Pakistan worked for it) or paid any taxes on this income after receiving it. The question is can we afford to tax it and so discourage it when we don't have much economy of our own and there are many ways to send money without government knowing it. Other inflows were oil money from U.A.E that flip flopped the Karachi real state recently. Money sent in millions by devout Muslims to their madrassas of choice. Money sent by foreign investors when they see excellent business opportunity. Now all the money that came in must been used for something that the country don't produce and must be imported. May be the people with resources are bringing back their money for local investment opportunities. Anyway, unless its used for regrowth of economy and jobs its will be wasted like a paint job after a while.
@S Qureshi: These imports are probably smuggled and thus do not pay any tax. Dubai is the source.
I am sure that 'normal' imports are subject to tax. They are not banned items.
Anyway, no one knows what explains this surge in remittances. However section 111 (4) of the tax law says that any inflow into Pakistan brought in through normal banking channels is exempt from any questions and any tax.
Now you go figure out what kind of inflows these are!
As I have said many times before, Pakistan is a great country to live in!
Our import bill is killing us.
Baboos in the Govt. has to stop the luxury imports for the rich. If they can not stop then at least tax them 500%.
Have you noticed the items on the shelves of your local grocery stores lately? A country which exports wheat imports corn flakes from USA. A country which exports potatoes imports french fries from USA. Even pop corns, pancake syrup, dry milk, candies & chocolates, BBQ sauces are imported from USA. The list is endless.
Most of the packaged food and beverages are imported/ made and sold by foreign companies. Same is true with cosmetics, health and beauty items, electronics products, medicine, communication equipments ( ie cell phones etc.) and even stationary.
Can a poor country like us really afford to let these imports in at this speed and without taxing them properly?
These hard earned $$ go out of the country at much faster speed than they come in. The policy makers at finance, trade and commerce ministries should think about it.
May Allah Bless these expatriates Pakistanis.
May our silly & corrupt politicians learn anything from them.
Time for Change has come
Respect the overseas Pakistanis for paying the national bills with few voting rights.The money our country is making from immigrants is surpassed by any export its capable of. Thanks to the self reliance of the educated and the hardworking citizens for getting education and finding a career overseas then payback the homeland for nothing but survival tactics.
That's a great sign for our country's foreign reserves but then we must utilize these resources to furthur develop our economy.