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FBR assessment reveals 90% of dollars in Pakistan being hoarded

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  • FRB member says govt making efforts for signing EDI agreements.
  • Says vigilance increased in bordering areas to curb terror financing.
  • FBR would devise action plan to curb mis-invoicing, smuggling.

ISLAMABAD: About 90% of the dollars are being hoarded in Pakistan while currency smuggling has just a 10% share, revealed a member of the Federal Board of Revenue (FBR) while talking about the assessment carried out by the board. 

According to The News, Mukarram Jah Ansari — who is an FBR member — said that the customs department has increased vigilance at the entry and exit points of the country including airports to prevent currency smuggling. 

“It’s the responsibility of other regulators and law-enforcement agencies to take action against those involved in speculation and hoarding of the greenback. We have found that the US dollar is cheaper in the neighbouring country; however, we have increased our vigilance in the bordering areas to curb terror financing,” he said.

Ansari said that the FBR seized dollars and Saudi Riyals in a few instances. However, as per the assessment, there is only 10% smuggling, while 90% is hoarding of dollars in the country. 

The FBR member also said that the government is making efforts for signing the Electronic Data Integration (EDI) agreements with different Central Asian Republics (CARs) — Russia and the United Arab Emirates (UAE) — to curtail mis-invoicing and under-invoicing. 

He dwelt upon various issues for bringing reforms into customs for improving the overall performance of the tax collection agency. He said Pakistan and China had signed an EDI agreement and both sides were exchanging trade data electronically.

After hectic efforts, he said, China agreed to extend the aggregate value of goods on a quarterly basis. Now discrepancy in the bilateral trade-related data has decreased significantly and is less than $3 billion, which a few years back possessed a difference of over $6 billion on per annum basis.

He said the customs department joined hands with the Pakistan Institute of Development Economics (PIDE) for conducting studies on mis-invoicing and smuggling with the mandate to come up with the exact levels. The result of the studies would be available by the end of the ongoing financial year 2022-23, he added.

He said the FBR would devise an action plan in order to curb mis-invoicing and smuggling. It’s relevant to narrate that the multi-billion dollar losses are estimated to harm the economy in the wake of under-invoicing on an annual basis.

To another query about the EDI agreement, the FBR member said the government would move ahead with signing EDI agreements with Uzbekistan and other CARs — Russia, North Africa and the UAE.

He said Pakistan Single Window and China Single Window would cooperate under the agreement. He said the manual One Customs would be closed down by March 2023 and WeBOC (Web-based One Customs) would be placed.

Ansari said the work on PSW was underway, as 77 entities would be integrated for the clearance of goods at entry and exit points in the country. The State Bank of Pakistan and commercial banks would integrate under the PSW soon.

The FBR member said in order to control currency smuggling, they had developed an electronic application that would be launched within the ongoing month. 

He said that this application will help declare currency through an online application and then scanning will share the whole information with the customs departments at airports, adding that the customs took stern action against Kheppeas and over two dozen FIRs were registered and persons involved were also arrested to penalise those involved in currency smuggling. 

Ansari said he had instructed the collectorates to select 10 cases in each jurisdiction every month and offered them to settle the cases through the Alternative Dispute Resolution Committee (ADRC). He said the mechanism for ensuring barter trade would be finalized, which would help promote regional trade in the context of Iran and other states.

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The cost of a liter of petroleum increased by much to Rs 8.14.

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Prices for gasoline and high-speed diesel were raised by the government on Monday by Rs4.53 and Rs8.14, respectively, for the upcoming two weeks.

In relation to this, the ministry of finance released a notice.

Diesel now costs Rs 290.38 per litre, while petrol is now priced at Rs 293.94 per liter following the most recent increase.

Additionally, light diesel cost Rs6.54 more per litre, to Rs174.34. A 6.69% increase in price to Rs193.8 per liter was made for kerosene oil.

The impact of the developing Middle East situation and the expanding global market are the main factors contributing to the transformation.

Before the most recent spike, the price of gasoline and HSD had risen by almost $4 and $4.50 per barrel, respectively, on the global market during the previous two weeks.

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Finance Minister Aurangzeb claims that Pakistan and the IMF are talking about a new multibillion-dollar initiative.

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The South Asian country is drawing to a close a $3 billion loan program with the International Monetary Fund that lasted nine months and was intended to address a balance-of-payments crisis that had put it in danger of defaulting last summer.

Pakistan has started negotiations for a new multi-year IMF loan program for “billions” of dollars, Finance Minister Muhammad Aurangzeb said in a Washington interview, with the final $1.1 billion tranche of that arrangement likely to be approved later this month.

Aurangzeb, a former banker who started his job last month, stated, “The market confidence, the market sentiment is in much, much better shape this fiscal year.”

“We really started talking with the Fund this week to get into a larger and longer program for that reason,” he continued.

A representative for the IMF informed AFP that the organization is “currently focused on the completion of the current Stand-by Agreement program,” which is a nine-month program that is expected to be finished soon.

The spokesperson went on, “The Fund staff is prepared to start initial talks on a successor program as the new government has expressed interest in a new program.”

“Third-year curriculum”
Aurangzeb’s journey to Washington will also include attendance at the IMF and World Bank’s spring meetings, which begin in earnest on Tuesday and have two distinct goals: supporting the world’s most indebted countries and aiding governments in the fight against climate change.

The IMF’s revised World Economic Outlook will be released to coincide with the start of the meetings, which bring together academics, representatives from the private sector, civil society, finance and development ministries, and central bankers to debate the state of the global economy.

Allegations of election tampering plagued Pakistan’s February 2019 elections, resulting in the imprisonment and disqualification of opposition leader Imran Khan and the persecution of his Pakistan Tehreek-e-Insaf (PTI) party.

The unstable alliance that surfaced, headed by Shehbaz Sharif, is currently charged with bringing about an economic recovery through the imposition of several controversial austerity measures.

Aurangzeb stated, “I do believe that we will be requesting for a three year program.” “Because in my opinion, that is what we need to help carry out the structural reform agenda.”

He went on, “I do think we’ll start getting into the contours of that discussion by the time we get to the second or third week of May.”

Keeping the US-China rivalry in check
Pakistan is in a difficult situation as the two nations have started an expensive trade war because of its strong economic ties to both China and the United States.

When asked how the Sharif government intends to handle its commercial relationships with the two largest economies in the world, Aurangzeb responded, “From our perspective it has to be a and-and discussion.”

“The United States is our biggest trading partner, and it has consistently provided us with support and assistance with our investments,” he stated. Therefore, that relationship will always be extremely important to Pakistan.

He was alluding to the nearly 1,860-mile-long China-Pakistan Economic Corridor, which was built to offer China access to the Arabian Sea, when he added, “On the other side, a lot of investment, especially in infrastructure, came through CPEC.”

According to Aurangzeb, Pakistan has a “very good opportunity” to participate in the trade war on par with nations like Vietnam, whose exports to the US have increased significantly as a result of tariffs placed on some Chinese items.

He stated, “We already have a few examples of that working.” “However, we must truly scale it up.”

reform initiative

Pakistan is currently engaged in a privatization campaign to sell off its underperforming state-owned businesses (SOEs) as part of the structural reform package agreed upon by the previous government.

The nation’s flag carrier, Pakistan International Airlines, is the first SOE on the list.

In regards to potential bidder interest, Aurangzeb stated, “we will find out in the next month or so.”

He said, “Our goal is to proceed with that privatization and see it through to completion by the end of June.”

Other businesses may soon follow if the government’s privatization of the PIA proceeds smoothly.

He declared, “We’re building a whole pipeline,” and added, “We want to really accelerate that over the next couple of years.”

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Owners of oil tankers stop the provision of fuel in favour of their demands.

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The Association declared on Monday that, in response to what it deemed to be an “unfair” measurement by the relevant authorities, gasoline delivery will stay suspended as of Tuesday.

According to the Oil Tankers Owners’ Association, they attempted to resolve their complaints with Deputy Commissioner Islamabad and Pakistan State Oil (PSO), but to no effect.

The Oil Tankers Owners Association has yelled slogans in support of their demand while parking their containers in the PSO depot.

The owners of oil tankers declared that they would not end their strike until their demands were met, accusing the administration of being to blame for the fuel crisis.

The association requested that the authorities abide by their requests, which included filling under a metered system. It further stated that the deal reached on February 20 had been broken by the authorities.

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