Forex traders urge Pakistan govt to recognize remittances as export earnings

Pakistan’s forex traders have urged the government to grant the exchange sector and overseas Pakistanis the status of an export industry by recognizing home remittances as export earnings.

The Exchange Companies Association of Pakistan (ECAP) met senior lawmakers at Parliament House on May 7 to present budget proposals aimed at boosting formal remittances, strengthening foreign exchange reserves, and expanding Pakistan's documented economy.

The ECAP delegation, led by Secretary General Zafar Paracha, held talks with Senate Standing Committee on Finance Chairman Senator Saleem Mandviwalla and members Senator Talha Mahmood and MNA Ali Musa Gilani.

What did ECAP propose for remittances in the 2026 budget?

Pakistan heavily relies on remittances sent by its overseas citizens to build its dollar reserves.

Workers' remittances rose to $3.83 billion in March from $3.29 billion in February, though they remained below the $4.05 billion recorded in March 2025.

The ECAP has called for restoring a PKR 2 per US dollar incentive on foreign exchange surrender to encourage overseas Pakistanis to use official channels to send remittances.

These measures, the association said, are aimed at curbing illegal hundi and hawala transactions.

How does ECAP want to improve formal remittance channels in Pakistan?

The association proposed allowing exchange companies to directly receive remittances from overseas senders into designated accounts supervised by the State Bank of Pakistan.

ECAP said the move would reduce intermediary costs, improve efficiency, and increase formal remittance inflows. The group also proposed direct integration with Pakistan's Raast instant payment system to enable real-time digital remittances and improve transaction documentation.

What tax reforms did ECAP request for exchange companies?

ECAP requested the removal of sales tax on foreign exchange transactions, arguing that such transactions were already recognized as non-taxable by the Council of Common Interests in 2014.

The association asked authorities to withdraw Sindh Revenue Board and Punjab Revenue Authority-related tax actions against the sector.

It also sought exemption from Section 6A of tax laws on digital transactions, saying exchange companies should not be classified as e-commerce or digital service providers.

What is ECAP's proposal on cryptocurrency and digital assets?

ECAP recommended that licensed exchange companies be allowed to operate under a regulated framework for cryptocurrency and digital asset-related activities.

The association said regulation through licensed entities would help document digital asset flows and discourage illegal trading.

The committee members welcomed the proposals and acknowledged the importance of strengthening formal remittance channels for Pakistan's economic stability.