The State Bank of Pakistan (SBP) has enhanced the retention rate from 35 percent to 50 percent on special foreign currency account bank accounts for freelancers.
The facilitation will encourage the freelancer to boost their export earnings and bring additional foreign exchange into the country.
The retention limit in ESFCAs has been increased from 35 percent to 50 percent of the export proceeds and the utilization of the retained funds has been further liberalized. Going forward, freelancers can freely make payments abroad of a current account nature from these accounts, without prior approval of SBP, the central bank said in a circular.
The same facility has been given to IT companies focusing on exports of the IT and ITes services in recent days, which was strongly recommended by the Ministry of IT and Telecommunication on the request of the IT sector, mainly exporters. However, the SBP issued the notification for IT companies and freelancers today.
The central bank also issued a framework of bank accounts for freelancers. Accordingly, freelancers will be allowed to open 2 bank accounts—Exporters’ Special Foreign Currency Account (ESFCA) and a primary Rupee account simultaneously.
Tufail Ahmed Khan, President Pakistan Freelancers’ Association (PAFLA) has welcomed the facilitation from the central bank for freelancers and termed it much needed for a conducive working environment of a strong gig economy.
The facility will give more empowerment to freelancers who will not only open foreign current accounts but it will also motivate them to generate more business from foreign clients to bring remittances to the country.
He said the policy on foreign currency accounts should be continued on a long-term basis whereas commercial banks should also welcome this step and facilitate freelancers to open local and foreign exchange accounts easily
As the freelancers focus on foreign markets, the country will not only receive foreign exchange but also additional revenues in terms of taxes, he added.