KARACHI - State Bank of Pakistan (SBP) Governor Ashraf Mahmood Wathra has said the bank will look into the possibility of reviving the SBP-KCCI Import Export Committee.

Speaking at a meeting during his visit to the Karachi Chamber of Commerce and Industry (KCCI), Wathra said that KCCI was the most important chamber of the country and it represented the largest city and played a vital role in the economic activities in Pakistan. He said that SBP expected a GDP growth of 5 percent next year, but it was focused on achieving a strong GDP growth of 7 percent, which would surely create jobs. He said the Ministry of Finance and the Federal Board of Revenue had agreed to increase the banking transaction threshold from the existing Rs50,000 per day to Rs100,000 for charging withholding tax in the upcoming budget of 2017-18.

Highlighting the growth in credit to private sector, the SBP governor said that credit to private sector had expanded to Rs348 billion this year as compared to Rs267 billion last year. He said that SBP was focused on two key aspects in the development of SME sector: creating an enabling regulatory environment and market development. “Seven percent of the total credit to private sector represents SME finance, which needs to be enhanced to 15 percent by 2020. This is not going to be an easy target so all stakeholders will have to make collective efforts. In this regard, we have already taken some practical steps,” he said.

He said that EXIM Bank had been established in order to provide export credit, minimise the cost of doing business and help exporters by reducing risks through export credit guarantees and insurance facilities. In this regard, he said, technical assistance had been sought from the Asian Development Bank and negotiations were at an advanced stage. He said the government had also published an advertisement to appoint a chief executive officer to the bank.

Former president of KCCI Siraj Kassam Teli said that some big names mentioned in Panama Leaks sent money abroad illegally, but interestingly, all of them claimed to have sent the money legally. This means some regulations exist for legal transfer of funds abroad, but ordinary people and even businessmen are totally unaware of such regulations, he said.

Underscoring the need to develop a proper system to raise awareness about regulations pertaining to remittance of funds abroad, Teli said that if anyone wants to transfer funds abroad for investment or any other purpose and regulations for such transfers are available, they should be publicised.

The BMG chairman advised the SBP to come up with a clear definition of remittances being sent abroad by categorising remittances sent abroad by business community and others, as there was a difference in funds being transferred by the business community and others.

“Although it is illegal even for the business community to transfer funds without paying income tax, businessmen transfer funds, which are extracted from their own businesses, whereas others remit stolen money and money collected through corrupt practices,” he explained, adding that some businessmen transferred funds for investment purposes whereas some transferred due to uncertainty in Pakistan.

Referring to Amnesty Schemes, he categorically stated that no amnesty scheme would help in bringing back funds to Pakistan due to trust deficit. He said that an Amnesty Scheme, which was strictly devised without considering the personal interests and legislated under the first schedule of the Constitution that will make it irreversible, may result in bringing back some funds otherwise amnesty schemes had always failed to achieve the desired results. Amnesty schemes are sheer injustice to loyal taxpayers who have been honesty and legally making their earnings and paying all the taxes, he opined.

Teli said the total number of bank accounts maintained by businessmen outside Pakistan might be greater as compared to others, but the funds in business community’s accounts would certainly be less as compared to the amount looted by others. “If funds in the bank accounts of 85 businessmen are evaluated and compared with the massive money lying in accounts of just 15 others, the consolidated amount of these 15 accounts will be much greater as compared to the funds possessed by 85 businessmen,” he said.

Earlier, KCCI President Shamim Ahmed Firpo highlighted the problems being faced by the business and industrial community due to imposition of 100 percent margin deposit on opening of Letter of Credit (LC) and Contracts for importing certain items. He said that this decision needed to be reviewed, as it would promote smuggling, inflate prices of many items and intensify problems of traders as well as general public.