PAKISTAN, the fifth largest country in the world by population, has vibrant diaspora communities in almost every economically developed country in the world. In almost every robust economy – such as Saudi Arabia, UAE, UK, USA, Oman, Qatar, Kuwait, Australia, Italy, Canada, Bahrain, ermany, France, Spain, Greece, Belgium, Ireland, Japan, Denmark, Sweden, Holland, Switzerland, Malaysia, Norway and China, the presence of our expatriates is for us a great pride. We are everywhere, thanks to our demographic resources.

The remittances from these diaspora communities are one of the major sources of foreign currency for Pakistan. This year, in particular, was historic as overseas Pakistanis sent unprecedented amounts of money home. The State Bank recorded more than $20 billion in remittances in the first eight months of the fiscal year, representing a growth of 7.6 percent over the same period last year.

Through their remittances, Pakistani expatriates support both the economy and their families. Their contributions are mainly spent on living expenses or invested in the purchase of real estate. Unfortunately, they face a painful ordeal when interacting with various public and private bodies during their investments in Pakistan. Some examples include the challenges faced when selling and buying real estate properties; protect properties against illegal possession; declare assets and sources of income to the tax authorities; responding to tax notices, carrying out banking transactions, etc.

More can be done to facilitate expats.

Policymakers have sought to attract remittances and foreign investment by offering various incentives and concessions to expatriates. Stakeholders from many departments, ministries and autonomous agencies are working to facilitate the access of Pakistanis abroad to the services they provide. For example, if an expat wants weapons or driver’s licenses, departments can give them priority processing in terms of protocol, special seating arrangements, or special counters to make it easier for them. They can also be facilitated by lowering service charges, giving them priority in service delivery, or creating other token privileges.

To facilitate Pakistanis abroad, the State Bank has encouraged the use of formal banking channels through Roshan digital accounts and online utility bill payment etc. Similarly, the Federal Board of Revenue has also created many privileges for Pakistanis abroad. If a non-resident Pakistani holds a Pakistani Origin Card, National Identity Card for Pakistanis Abroad or Computerized National Identity Card, and uses a Foreign Currency Value Account or Value Account in rupee NRP maintained with authorized banks in Pakistan, the person is entitled to many privileges. .

For example, when selling or transferring real estate, they have the privilege that the withholding tax collected from them is treated as the final discharge of their tax liability in lieu of the capital gains they have realized, which are otherwise taxable on the property that is to be sold. Secondly, when buying a property, the tax collected from Pakistanis abroad is considered as the final discharge of their tax liability, which is otherwise deducted at 1% from the fair market value of the property . Thirdly, Overseas Pakistanis can enjoy tax exemptions when any profit on the debt is from a rupee account held with a regular bank in Pakistan and when deposits into said account are made exclusively from currency paid into it.

Fourth, although anyone whose income for the year is subject to final taxation is required to file a tax return, non-resident Pakistanis are not required to do so. Fifth, non-resident Pakistanis are not required to follow prescribed procedures for taxpayer registration. Finally, expatriates are not required to pay an increased tax rate of 100% if their name does not appear on the list of active taxpayers, as others are required to do.

These incentives and privileges are very good, but FBR can do more to facilitate Pakistanis abroad. For compelling reasons, our expatriates have little time to spend in Pakistan with their loved ones. They need facilitation, education and support for a faster, cheaper, convenient and efficient flow of remittances through normal banking channels, as required by tax laws. They need awareness and knowledge regarding investment opportunities in Pakistan and their tax implications.

In order to take an institutional approach to facilitate Pakistanis abroad, why not reach out to this workforce of millions at the doorstep of their workplaces in their respective regions? Pakistani consular missions and offices already established in various countries can be engaged in their facilitation, especially in financial matters, with the active participation and support of RBF.

The writer is a civil servant.
Twitter: @RashidJavedRana
[email protected]

Posted in Dawn, March 12, 2022