Govt to Phase Out Remittance Incentives to Save Rs. 118 Billion

The federal government has decided to scale back remittance incentives offered to overseas Pakistanis from July 1, 2025, to reduce the annual cost from Rs. 206 billion in FY25 to Rs. 88 billion in FY26. The State Bank of Pakistan (SBP) informed the Economic Coordination Committee (ECC) on June 27 that five remittance incentive schemes are currently in place, with the TT Charges Scheme being the largest. It alone accounts for Rs. 170 billion this fiscal year. Under the existing scheme, remitters receive SAR 20 for each transaction of $100 or more, an additional SAR 8 per transaction for up to 10% ($100 million) annual growth, and a further SAR 7 per transaction for growth beyond 10% or $100 million. SBP has proposed raising the minimum eligible transaction from $100 to $200, replacing variable incentives with a flat SAR 20 per eligible transaction, and merging the Exchange Companies Incentive Scheme (ECIS) into the TT Charges Scheme. SBp has further proposed discontinuing the Marketing Incentive Scheme (MIS) from FY26. ECC approved the proposals with instructions for SBP and the Finance Division to: Members agreed that any withdrawal must be gradual due to behavioural impacts on remittance patterns.