Lahore: Former finance minister Hafeez Pasha Tuesday claimed that Pakistan generates only Rs3 billion from 80,000 landlords on an income of Rs900 billion, while the poor people pay Rs120 billion in taxes on food and beverages.
Speaking to traders at an event in Lahore, the former finance minister drew a bleak image of Pakistan’s economy, saying that the economic situation is deteriorating and the system will collapse if the government does not take adequate measures.
Talking about the rupee/dollar value, Hafeez Pasha said that the actual value of the US dollar in Pakistan was Rs295. He said that the government had placed an artificial cap on the value of the US currency to strengthen the Pakistani rupee.
He added that the engineering of the dollar rate was destroying the economy by affecting remittances and exports.
Last week, the State Bank of Pakistan reported that remittance inflows declined by 11.1% in the first half (July – December) of the fiscal year 2023 to record $14.052 billion compared to $15.807 billion recorded in the same period last year.
Experts believe that the sharp decline in remittance inflows is due to the fact that overseas Pakistanis have opted for unofficial channels as they are offering a much higher exchange rate.
Remittances inflows fall 4.8% MoM in November of FY23
Currently, the interbank PKR/USD rate is Rs228.66. However, the open market rate is around Rs40 higher than the interbank. Resultantly, workers overseas go far unofficial channels like hawala and hundi to send back dollars.
It is important to note that Pakistan heavily depends on the influx of remittances to meet its foreign exchange needs because exports hardly cover the high level of imports.