State Bank of Pakistan is considering to discontinue the currency notes with denomination value of Rs. 5,000, said State Bank of Pakistan (SBP) Deputy Governor Saeed Ahmad while briefing a recent meeting of Public Accounts Committee.
He said that certain quarters have approached State Bank requesting to discontinue Rs. 5,000 currency notes, after which the central bank is evaluating the situation and may discontinue the said currency notes.
Deputy Governor was of the view that coins are preferred globally due to longevity and lesser chances of forgery, coupled with requests from various quarters, it has compelled the bank to consider the future of Rs. 5,000 currency note.
Sheikh Rasheed Ahmed, a PAC member, opined that there has been an increasing trend of fake Rs. 5,000 currency notes, causing notable loss to masses. Moreover, these high denomination value notes are used in illegal activities as criminals can carry large amount without any fear of detection.
Deputy Governor SBP explained that while there might be difficulties in carrying large amounts for business transactions, forgery cases are alarming and demanded a discussion whether to continue or discontinue the Rs. 5,000 denomination notes.
It would be interesting to note here that the cost of minting a coin — of almost any value — is Rs. 3 and it it lasts up to 40 years. While on other hands, the cost of printing a Rs. 100 denomination note is Rs. 3.6, but it lasts only from six months to two years.
Also Read: SBP is Not Working on Any New Design for Currency Notes in Pakistan
Untrue story. Actually business individuals are keeping money in cash vaults and bank lockers to avoid tax and Rs 5000 denomination is their favourite. Its easy to carry and favourite for cash transactions. I believe that discontinuing the 5000 note is good idea to force people to keep money at banks and ultimately bringing them in tax net.
My prediction is that big prize bonds will be discontinued in next phase.
I am not fond of present Govt but I do praise their will to regularize the economy by bringing businessmen in tax net.
I just read in your words, what exactly came in my mind
agree with you. but this will still give a positive move or still not?
I doubt certain business people will be effected by this and will continue to operate outside of tax system; however, it would bait in more people in the tax system which would be beneficial overall for the economy. Also, it may improve the value of the currency as well since larger denomination currency devalues it but there’s very little trust in the government and judicial system overall so I doubt we will see any improvements. At least in my opinion since everything (almost) is owned by our politicians in one way or the other so middle class and poor families will suffer more.
Well the cash can be changed over the counter without having a proper track. If they state that the currency change shall only be done if the amount is been changed 1st by depositing the amount in your account and then the Commercial bank shall change them then it make sense. But your point is also very valid. If such is case then people are going to purchase the Prize Bonds because it’s again a bearer’s instrument and no track shall be made on it’s purchase.
businessmen & Traders are using 5000 notes bcuz of the unjustified tax on banking transactions by Ishaq Dar githha… reverse that then you can do anything you want with currency notes…
Have you any moral justification to avoid tax?
Only 0.3% Pakistani’s are tax payers whereas 3% Indians pay taxes, 10 times higher than Pakistan.
We salaried class are idiots to pay taxes…..
Listen, FBR is already started chasing people who own cars and don’t pay any income taxes.FBR has direct access to all bank accounts.
At present Govt has all resources to chase tax thiefs.
Wrong Sample size brother!! 0.3% of pak is way over the top of 3% indian one coz of population!! & im not justifying the tax evaders here.. but tell me the logic of applying transactional tax on banks? which country has this modus operandi!?
In the US their is a non utilization tax on monry you keep in your bank and not use it for a specific time.
Comparison of percentages is basic math… If you can understand.
that’s exactly what i was trynna say.
Sorry to say bro but you’re going in wrong direction, when it comes to Percentage then population doesn’t matter.
It means out of every 1000 People, in Pakistan 3 people pay tax & in India 30 people pay tax.
O Bhai jaan.. From Today I will pay 45% GST on EVERY Litre of Diesel… Salary se bhi jata hai.. internet pe bhi jana shoru ho gia.. phone pe bhi.. aur kitna tax chahiye
Where in Quran it is written to pay taxes ? Only zikat and sadiqa is written
Well, I am not an expert in Quran knowledge but if it is so then don’t expect projects like roads, schools, hospitals since they cannot be built through zakat & sadqa.
I remember reading in some Ahadith that the Govt can charge taxes for its expenses…., again, I am not an Islamic Scholar.
Lower the taxes first. Then you will see increased number of tax payers.
Mr Idiot, we are indirectly paying more taxes than directly paying stupid income tax and professional tax and blah blah. And I would love to keep my money in my vault than throwing it away in banks and pay useless tax to top up the pockets of politicians.
When the taxes were low people refused to pay, hence taxes were increased to cover the shortage. What makes you think that people would pay taxes once it os lowered ? All the public services like roads, lamp posts, etc are costs that we all need to share. If more than 95% of the Pakistan’s population do not want to pay their fair share to the society what really do you expect. People just can’t have best of both worlds where they want to be part of the society and not pay their fair share
I don’t know if you agree with me on this but I think high schools must make it mandatory for students to take basic finance and money and banking courses. Our population has no clue about effects of larger denominations and how money is multiplied. With less money going through banking channels means that money multiplier is declining which causes a ripple effect thus increasing borrowing costs and stuff. These are basic things that everyone should know to a certain degree.
THANKS WASEE AKHTER BHAI SENIOR JOURNALIST CHICAGO
Haha. I am Banker at Faisalabad!
Currently US Dollar rate is rising. Seems like black money being converted to foreign currency on speculations that Govt may abolish big prize bonds.
Not a good decision in my opinion. Our currency is not like US dollar.
They Should work on producing new Plastic based currency notes that have more security features and near impossible to replicate. Also releasing Rs. 10000 note for easier cash carrying
Coins are not the solution (Plus the new alloy based coins are more easy to be replicated compared to previous coins we had)
Well Sidra our cash is not been used as cash they are been used in Haar and other idiotic things. On top of that we have to staple the cash once you put staple again and again it reduces the life of the paper or any other material. So once we shall not make changes in these thing then the Currency note should be prepared by metal.
Use of staple has been banned, its a crime.
Unsorted cash can be stapled but Sorted and Fresh Cash can’t be stapled.
Keeping the 5000 pkr note and adding a 10000 pkr note will only create more tax evaders, bribery and make it easy for extortionists, blackmailers to carry money.
If you are paying your due taxes, write a check, use plastic, much safer than carrying cash.
To all those crying about the 0.3% tax on transactions over 50k….people should pay thier god damn taxes and there will be no 0.3% tax on their transactions, only non tax files are paying this tax. People not paying taxes are stealing from us, the tax paying population of Pakistan and then crying like a baby when the govt takes steps to make sure that you steal less from us, its pathetic.
You do understand that larger denominations devalue your currency. I hope you understand the economic implications of this. Our currency will be like Zimbabwe and inflation will soar through the roof.
For 35 years I have been filling up tax returns every year regularly. Now I am 73 years old. I should again start that rigmarole again to save my hard earned pension…lanat hae AIDAY system per!!!
For 35 years I have been filling up tax returns every year regularly. Now I am 73 years old. I should again start that rigmarole again to save my hard earned pension…lanat hae AIDAY system per!!!
We always pay Lanat to this system yet again vote for PMLN.
Yes, welcome to a country where the nation is corrupt.
I suggest to all peoples of Pakistan that they will must be registered their self with FBR and obtain NTN No. and submit their Income tax returns in which they show their annual income which is higher in millions and lower in thousands but they will claim all withholding taxes which are deducted on Salary, Bank accounts, Electricity, Telephone, Mobile, restaurant’s and shopping center’s registered bills etc. if your income taxable pay tax and if your income is lower than taxable than claim refund of all captioned taxes. In fact Maximum of our poor peoples are lower than taxable and they not aware about unjustified taxes and refund rules.
Refund rule clearly mentioned that in 45 days of application refund release. but this is just rule like a our 1973 Constitution which is just in a book but you does not claim your rights on its basis.
Getting subscribed with NTN and FBR online system is in favor of everybody.
There’s another story to it and M Waseem has put it excellently in the comments. Besides larger denomination notes and coins significantly devalue the currency. If banking is made cheaper and becomes widely available to people to will encourage to perform their transactions through a banking channel hence there will be paper trail for larger transactions which could enable to determine if the money is laundered or not. Doing so will bring more people in the tax net because paying by debit or credit is far more easy and convenient than carrying money in pocket.
A note to Government, Pakistan ka churaya howa paisa wapis kero aur corruption kerni band keroo…. Is se IMF ka qarza bhi utter jaye ga, pooray mulk ke halat bhi sanwar jayain gain aur reservers bhi overflow ho jayain gain aur Pakistan taraqi ki rah per gamzin ho ga. Yeh kerne ke baad tax ka ek proper system develop kerwao kissi baher ki tax and law firm se because i highly doubt the credentials of our leaders and their minions
why can’t they print Plastic notes instead of Paper notes, similar to Australian and Singapore notes. Plastic notes have much longer life and would be cost effective, especially Rs. 10 , 20 and 50 notes
Switzerland has 1000 swiss francs note. Without much corruption and problems.
Cost of higher denomination notes decreases the total cost of notes in circulation. Indian recent experiment with currency notes should be avoided.
Tax is not a panacea but a burden. Governments by and large waste money and are the largest source of corruption itself. It’s strange that such a one-sided debate goes on which is favourable to the state and so bad for the public. To be favourable to more and higher taxes with already so high wastage and corruption is beyond me. A better approach maybe to assess income shown and property and assets owned.
AS Assets can not come into existence without funds. And that is a proper source to be taxed.
its time to comes in cryptocurrency. high secure, transections in seconds, no duplication. leave fiat money. 75 % of the world regulated the crypto.
Itnay experiment to scientist bhi nhi kertay hongay jitnay SBP currencies kay sath kerta hy !! Since 1947 kitnay currency notes and coins change keyai hain !!
Itni brahi organization hy, they must plan for atleast 10 to 20 years. but they are thinking only for a month or year, and then after year, some modification / cancellation notification will comes in market,
these peoples are playing with economy and peoples trust, and acting like small kid.
World is switching to Plastic notes due to long life. Cant we also print 50,100 and 500 notes on plastic.