Is government going to ban Rs5000 notes?
As the fiscal year 2024-25 budget announcement approaches, the Overseas Investors Chamber of Commerce and Industry (OICCI) has proposed significant measures to the Pakistani government aimed at discouraging cash transactions and promoting financial transparency.
Chief among these recommendations by OICCI is the abolition of the Rs5,000 banknote, which the OICCI believes will help reduce the reliance on cash and curb illicit financial activities.
The OICCI, representing 200 multinational companies and a substantial portion of foreign investment in Pakistan, has also suggested that the National Tax Number (NTN) be mandated for a variety of financial and transactional activities.
These activities include opening bank accounts, purchasing or selling vehicles and high-value properties, undertaking foreign travel, and obtaining memberships in clubs.
The goal is to enhance the documentation of the economy, ensuring that more transactions are reported and appropriately taxed.
In addition to these measures, the OICCI has recommended the creation of a dedicated wing within the Federal Board of Revenue (FBR) to investigate the assets and income sources of non-filers.
This initiative aims to broaden the tax base and ensure greater compliance with tax laws. The chamber has also called for the abolition of tax exemptions currently enjoyed by pensioners.
Another notable proposal from the OICCI includes the collection of income tax on all air tickets and the imposition of withholding taxes on hotel and travel expenses.
By targeting these sectors, the OICCI believes the government can capture additional revenue and ensure a fairer contribution to the national exchequer.
These suggestions echo previous calls for similar measures.
Is government going to ban Rs5000 notes?
Last year, Pakistan Tehreek-e-Insaf (PTI) senator Mohsin Aziz introduced a resolution in the Upper House of Parliament advocating for the ban of the Rs5,000 note to combat corruption and control inflation.
Similarly, former FBR chief Shabbar Zaidi emphasized that high-denomination notes facilitate the cash economy, where significant wealth is stored outside the banking system in the form of Rs5,000 notes and US dollars.
However, there is no official confirmation whether Pakistani government will accept this proposal or reject it.
