Mr Shaukat Tarin, Advisor to the Prime Minister on Finance and Revenue, visited the office of Pakistan Banks’ Association (PBA) in Karachi, on Friday, November 26, 2021 & met its Executive Committee. Mr. Muhammad Aurangzeb, Chairman, PBA, and Mr. Tawfiq Hussain, CEO & Secretary General, PBA, welcomed the Advisor to PBA.
Mr. Tarin lauded the role of PBA, saying that it has become an increasingly effective and vibrant body.
Matters pertaining to the banking sector were discussed and Mr. Tarin emphasized the need for the banks to aggressively grow their deposit base so that the saving rate of the country increases and moves closer to those in countries similar to Pakistan. On this, PBA pointed out the continuing wide disparity between the lower tax rates on profit/dividends from investment in shares listed on stock market and in units of mutual funds, & the tax rates on profit from bank deposits classified as “profit on debt”. Mr. Tarin understood this disparity.
Apart from the need to diversify lending, both geographically and sectorally, Mr. Tarin asked the banks to also focus on product innovation. He specifically asked the Development Financial Institutions to develop long term paper. Talking about Kamyab Pakistan Program, Mr. Tarin asked for more banks to participate in the second bidding process. On Roshan Digital Account, Mr. Tarin emphasized the need for banks to also push this offering in markets other than UAE.
In response to PBA’s concern on the huge disparity in tax rates on banks and the tax rate on corporate sector and the continuation of Super Tax on banks, which stands withdrawn from the corporate sector, Mr. Tarin understood and agreed with the PBA concern and said that the Government will look into the matter.