Will Rupee Devalue Further? Economic roller coaster

[capsat]

pata nahi PTI ki kiya soch hai?

thinking, laying down course, setting goals, execution and achievements, all require long term planning. Which sitting government have seriously ignored since oath taking. They are over derailing track if & when next general elections happen results will put them in serious AWE.

[Nabs]

https://www.dawn.com/news/1639563
(Worth a read) Falling foreign direct investments in Pakistan when its booming in South Asia and developing countries.

Last month a new policy also kicked in that makes it harder for IT services export sector to get tax exemption on foreign remittances. Also imposed 1% withholding tax on remittances. Its not very difficult for IT export sector to move to UAE where you pay zero tax.

[capsat]

UAE where you pay zero tax.

UAE introduced VAT on Jan 01 2018 which varies

other then the FOOD & Medicines, every nitty gritty item is taxed.

cost of managing a business have quadrupled in past 3 years. only the trade license renewal fee which used to be US$5000 has shot upto U$$20,000.00 in just 3 years.

rentals have significantly dropped due to COVID which is only a temporary phase. But I believe paying tax in Pakistan and living respectably under own environment is far better then living in Glittering GCC where the locals under the surface does not like Pakistanis. They never spare a chance to humiliate a Pakistani business owner or a freelancer technically skilled individual.

[Nabs]

Export proceeds are exempt from VAT in UAE.

[Xulfiqar]

Problem is that the infrastructure is trash in UAE, even very simple tasks take unusually long.

The labor you find there is either

1 - too expensive and already taken up if they are high skill quality type

2 - too useless (almost lemmings) type and prove to be burden to business rather than asset.

And getting anything done at govt level is a herculean task due to their local ivory tower syndrome along with moronic national values.

But whats wrong with paying tax in Pakistan?

[mgalaxy3]

But whats wrong with paying tax in Pakistan?

IT exporters, who bring $$ into the country, are actually PAID BY the govt for bringing in $$ for IT. THat's being done in Bangla, India.

So, instead of paying 'tax', such IT exporters are paid incentives by the govt as they are doing a big ehsaan on govt for bringing in remittances and not keeping it out of the country.

this is done in all developing countries to encourage IT.

[Xulfiqar]

Really?

Tell me more about those ehsaans/favours?

[nfssaad]

references please

[uzeemujeeb]

IT exporters are paid incentives

PAID Incentives ?? sir thats' not correct.
Indian Govt MoIT registered corporates only receive incentives in selected regions, in terms of subsidies, low taxation slabs and elevated credit line. rest assured other then that they get treated no better then how GoP treat their tax payers'. (after all we share the common Royal masters 70 years ago who left the region with Kala Angrez 'saheb' class mindset as in CSS / ICS bureaucracy)

[uzeemujeeb]

Glittering GCC where the locals under the surface does not like Pakistanis.

thats correct sir, some of my relatives from in-laws side recently wrapped up their general trading business in Abu Dhabi, shifted to Qatar where Pakistanis' still enjoy high level of respect and regarded as equal human.

their basic concern is changing civic moral and educational values across UAE. Hindu influence is getting darker over UAE and it has been more jew dominated after 2019 policy change towards Israeli jews. they witness mass influx of Jew business houses establishing in free hold area of UAE. Under the new revised policy foreigner can own the land over 55 year lease and enjoy resident status (a new palestine in making)

[capsat]

IT exporters, who bring $$ into the country, are actually PAID BY the govt for bringing in $$ for IT. THat's being done in Bangla, India.

That is a false propaganda.

in UAE, at 7th floor of my office building in DIC an indian software house exist.
a guy from Haryana is resident director. for past 7 years (when am there) we meet in building lounge every Thursday evening before heading home, we always discuss issues and policies of our respective countries. (he is in deep love with Hunter Beef from Hanifia at New Town in Karachi)

he consider pakistan govt taxation policies as most lenient for foreign income(s). for example according to him any amount sent to India as professional fee is subject to 15% federal income tax. State Taxes are seperate and highly variable. Home remittances are tax exempted just like Pakistan.

For this reason Banglaore in India is developed by Ind.Govt, they made IT city also known as silicon valley of India which has entirely different infra structure. High Capacity Internet connections zero power break downs etc etc.

be Thankful to GoP, all foreign income is subject to single digit with-holding-tax only and there are no state taxes (provincial taxes) for such income generators.

[Xulfiqar]

But i want to know from him how much the “gormint” pays the IT sector?

[uzeemujeeb]

every government charge tax for conducting a business or services. slabs vary as per country's regulations.

i get a pay slip and it has TAX deduction item which is a 5 figure amount every month., at year end it goes to 6 digit figure which i can only look at. It is like mayree tankha mujhi sai tax lay ki dee jati hai

[kaashiif]

its same with everyone and same figures for me but what do I get in return? Children don't go to Govt School, family members don't go to Hospital and no other services I get from Govt only services that I get are paid Govt services.

[mgalaxy3]

But i want to know from him how much the “gormint” pays the IT sector?

10% cash back / rebate!
E.g. if you export $100, BD government will pay you 10 taka/rupees on top of your ICT exports.

5% cash rebate in India.

Still not convinced?
https://www.thedailystar.net/business/ict-exporters-get-10pc-cash-incentive-1532974

@uzeemujeeb @nfssaad @capsat

BTW here's a detailed list of incentives offered in most Asian countries for IT exporters.

Pak got very very little incentives.

IT companies by operating in Pak are doing a big Ehsan on government as they are now exporting multiple billions of dollars.

@nabs

[uzeemujeeb]

sir with great respect i request you to obtain data from 'PASHA' (www.pasha.org.pk) for the IT export (benefits) related data. Just like B'Desh & India, in Pakistan PASHA is the central organization to safe guard & protect IT export related benefits to GoP registered software houses.

[mgalaxy3]

I've pulled it from there actually.

[Xulfiqar]

I would suggest to pull it again - this time by calling them.

Then tell us how much the "gormint" pays them. Then also us - how much in multiple of billions are being exchanged.

Also do explain the categorization of "tax-free imports" for these categories, what do they consist of? What are they importing?

in Pakistan WHT is not even being exercised 5% compared to those other countries, which btw is a joke to compare as WHT is akin to a deposit.

[uzeemujeeb]

US$1 = Rs. 164.95 in open market

[Nabs]

Just had a remittance clear at 165.1 at interbank rate. So open market must be above 166.