SBP Raised Retention Rates For Freelancers
The State Bank of Pakistan (SBP) has increased the retention rate on special foreign currency account bank accounts for freelancers from 35% to 50%.
The assistance will encourage freelancers to increase their export earnings and bring more foreign exchange into the country.
The retention limit in ESFCAs has been increased from 35% to 50% of export proceeds, and the use of retained funds has been further liberalized.
In the future, freelancers can freely make payments abroad of a current account nature from these accounts, according to a circular issued by the SBP.
MoITT Recommendations
In recent days, the Ministry of IT and Telecommunications strongly recommended that IT companies focusing on exports of IT and ITes services be granted the same facility, which was requested by the IT sector, primarily exporters.
However, the SBP issued a notification today for IT firms and freelancers.
In addition, the central bank issued a framework of bank accounts for freelancers.
As a result, freelancers will be able to open two bank accounts at the same time: an Exporters’ Special Foreign Currency Account (ESFCA) and a primary Rupee account.
PAFLA President Welcomed the Development
Tufail Ahmed Khan, President of Pakistan Freelancers’ Association (PAFLA), has welcomed the central bank’s facilitation for freelancers, describing it as much needed for a conducive working environment of a strong gig economy.
The facility will empower freelancers by encouraging them to not only open foreign current accounts, but also to generate more business from foreign clients in order to bring remittances to the country.
He stated that the policy on foreign currency accounts should be maintained indefinitely, while commercial banks should also welcome this step and make it easier for freelancers to open local and foreign exchange accounts.
As freelancers focus on foreign markets, the country will receive not only foreign exchange but also additional tax revenue, he added.
To read our latest blog on “For freelancers bank accounts, new framework devised by SBP,” click here.
