The Special Investment Facilitation Council (SIFC) has taken a decisive stance against the grey currency market, directing the State Bank of Pakistan (SBP) and the Federal Board of Revenue (FBR) to implement measures aimed at curbing the flow of foreign exchange through informal channels.
The SIFC has tasked SBP governor with identifying the factors contributing to the resurgence of the grey currency market and working collaboratively with FBR and finance ministry to address these underlying issues.
To combat the grey market, the SIFC has instructed the finance secretary to form a working group to reinstate the Cash Over Counter Facility at National Bank of Pakistan branches, particularly at border crossings. This move aims to provide individuals with convenient and secure options for remitting foreign exchange through official channels.
In addition, SBP, in partnership with the Ministry of Information, will launch a public awareness campaign to educate the public about the benefits of using formal banking channels for remittances and the risks associated with informal transactions.
To gain a deeper understanding of foreign exchange flows, the SIFC has mandated a third-party study by SBP and the Public Private Partnership Authority (P3A). This study will assess the current inflow and outflow of foreign exchange and explore potential mechanisms to securitize remittances.
The Executive Committee of the SIFC has communicated these decisions to relevant stakeholders, emphasizing the urgent need for implementation.
Furthermore, the SIFC has called for a comprehensive restructuring of FBR, including the reconstitution of the federal policy board, separation of Customs and Inland Revenue operations, and the establishment of oversight boards.
To enhance tax revenue, the SIFC has instructed FBR to develop a detailed action plan for digitalizing and restructuring its operations. The goal is to increase the tax-to-GDP ratio from 8.5% to 18% by 2029.