The State Bank of Pakistan (SBP) has abolished the requirement of the ‘R’ Form for freelancers and IT exporters, and ordered payment within 24 hours to encourage the flow of remittances on Tuesday.
What is ‘R’ Form for freelancers
‘R’ Form for freelancers in Pakistan is a declaration form required by the SBP to report international payments for services.
This is typically handled by your local bank, not the freelancer directly. However, IT exporters and freelancers are no longer required to submit Form ‘R’ for each individual payment.
The SBP has announced a major relaxation in the regulatory procedures for IT companies and freelancers to promote exports of digital services in the country.
Instead, they only need to provide a one time declaration at the time of opening an account to state the nature of their services
The purpose of these reforms is to increase the pace of development of the IT sector by removing bureaucratic hurdles.
What does this mean
This means that now IT exporters will not be required to submit Form ‘R’ for every transaction. And it will be enough to give a declaration only once while opening an account.
After this, the banks will automatically process the transaction.
The State Bank has made it mandatory for banks to process requests for collection or remittance of money from foreign currency accounts within a maximum of one working day, that is 24 hours.
The limit for submitting Form ‘R’ has been increased to USD 25,000. This will greatly reduce the administrative burden on small and medium freelancers.
All banks have been directed to set up a special internal system for the timely redressal of complaints of IT exporters.
The State Bank has encouraged the digitisation of Form ‘R’, Inward Remittance Voucher (IRV). And Form ‘M’ and provide the facility of automatic data entry in them.
The central bank expects that these measures will improve the flow of remittances. It will also make it extremely easy for the youth working in the IT export sector to do business.
Minister for Information Technology (IT) Shaza Fatima Khawaja welcomed the reforms of the State Bank.
She said that an effective complaints system has been created for IT exporters and freelancers. And the measures will contribute to the promotion of IT exports and the freelancing sector.
