The government’s decision to reduce incentives on foreign remittances may affect the flow of money sent home by overseas Pakistanis. These incentives had previously encouraged people living abroad to use formal channels for transferring funds. Now, the cuts could discourage some from using banks and official services, potentially pushing them back toward informal routes that are less secure and these transfers may also become more expensive overall.
For many families, remittances are a vital lifeline. These funds often support daily expenses, education, healthcare, and small businesses. If incentives decline, overseas workers may hesitate to send money through official systems. This could lead to delays or lower amounts reaching families. At the same time, the banking sector might earn less revenue, which could affect its willingness to offer remittance-friendly services in the future.
The government says the reduction in incentives is part of a broader effort to reduce public spending and address economic challenges. While this move could help the national budget, there is concern that it may reduce the benefits of formal remittance channels. Critics say that such incentives are essential tools for keeping remittances transparent and reliable.
Moving forward, authorities will need to find a balance between cutting costs and ensuring that migrant families continue to access safe and affordable ways to send money. A sudden drop in remittance inflows could affect both individual households and the wider economy. The challenge will be keeping remittances strong without placing additional strain on public finances.