Dollar Price May Cross Rs200

Web Desk — Dollar prices may cross Rs200 after the Federal Board of Revenue (FBR) imposes a withholding tax on exchange companies, which are receiving notices to the tune of hundreds of millions of rupees.

According to exchange company representatives, the FBR is sending them notices regarding non-payment of withholding tax that was withdrawn in 2016.

Tax notices have caused panic among exchange companies and their representatives insist that any additional costs will be passed on to customers, which may push the dollar rate beyond Rs200.

“Exchange companies are receiving notices that they must pay up to Rs1 billion in withholding tax. In 2014, it was implemented and withdrawn in 2016,” said Malik Bostan, chairman of the Exchange Companies Association of Pakistan.

He said the companies will pass on the 16 percent withholding tax to their customers, who will have to bear an additional cost of up to Rs20 per dollar. This will result in an exchange rate of Rs200 or higher.

With the market already volatile and the government under pressure, Mr Bostan said the withholding tax makes no sense. “We told him about the consequences of the 16 percent withholding tax in a meeting with the FBR chairman,” he said.