PROTECTION OF ECONOMIC REFORMS ACT 1992

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PROTECTION OF ECONOMIC REFORMS ACT 1992  
(XII of 1992) 
CONTENTS 
1. Short Title Commencement And Application 
2. Definitions 
3. Act To Over-ride other Laws. 
4. Freedom to Bring, Hold, Sell And Take Out Foreign Currency 
5. Immunities to Foreign Currency Accounts. 
6. Protection of Fiscal Incentives for Setting-up of Industries 
7. Protection of Transfer of Ownership to Private Sector. 
8. Protection of Foreign and Pakistan Investment 
9. Secrecy of Banking Transaction. 
10. Protection of Financial Obligation. 
11. Rules. 
TEXT 
PROTECTION OF ECONOMIC REFORMS ACT 1992  
(XII of 1992) 
[18th August, 1992] 
An 
Act 
to provide for furtherance and protection of Economic Reforms 
WHEREAS it is necessary to create a lib eral environment for savings and 
investments; and other matters relating thereto; 
AND WHEREAS  a number of economic reforms have been introduced and 
are in the process of being introduced to achieve the aforesaid objectives;  
AND WHEREAS  it is necessary to provide legal protection to these reforms in 
order to create confidence in the establishment and continuity of the liberal economic 
environment created thereby; 
It is hereby enacted as follows:– 
1. Short title, extent and c ommencement.– (1) This Act, may b e called the 
Protection of Economic Reforms Act, 1992. 
(2) It extends to the whole of Pakistan.  
(3) It shall come into force at once. 
2. Definitions.– In this Act, unless there is anything repugnant in the subject or 
context: 
(a) "Government" includes bot h the Federal Government and any 
Provincial Government;  
(b) "economic reforms" means economic policies and programmes, laws 
and regulations announced, promulgated or implemented by the 
Government on and after the seventh day of November, 1990, relating 
to privatization of public sector enterprises, and nationalized banks, 
promotion of savings and investments, introduction of , fiscal incentives 
for industrialization and deregulation of investment, banking, finance, 
exchange and payments systems, holding and  transfer of currencies; 
and  
(c) All other expressions used in this Ordinance shall have the meaning 
respectively assigned to them under the relevant laws.  
3. Act to Over -ride other l aws.– The provisions of this Act shall have effect 
notwithstanding anything contained in the Foreign Exchange Regulation Act, 1947 
(VII of 1947), the Customs Act, 1969 (IV of 1969), the Income Tax Ordinance, 1979 
(XXXI of 1979), or any other law for the time being in force. 
4. Freedom to bring, hold, sell and take out foreign currency.– All citizens of 
Pakistan resident in Pakistan or outside Pakistan and all other persons shall be 
entitled and free to bring, hold, sell, transfer and take out foreign exchange within or 
out of Pakistan in any form and shall not be required to m ake a foreign currency 
declaration at any stage nor shall any one be questioned in regard to the same. 
5. Immunities to foreign currency accounts .– (1) All citizens of Pakistan 
resident in Pakistan or outside Pakistan who hold foreign currency accounts in 
Pakistan, and all other persons who hold such accounts, shall continue to enjoy 
immunity against any inquiry from the Income Tax Department or any other taxation 
authority as to the source of financing of the foreign currency accounts.  
(2) The balances in  the foreign currency accounts and income there from 
shall continue to remain exempted from the levy of wealth -tax and income tax and 
compulsory deduction of Zakat at source.  
(3) The banks shall maintain complete secrecy in respect of transactions in 
the foreign currency accounts.  
(4) The State Bank of Pakistan or other banks shall not impose any 
restrictions on deposits in and withdrawals from the foreign currency accounts and 
restrictions if any shall stand withdrawn forthwith. 
6. Protection of fiscal i ncentives for setting -up of industries .– The fiscal 
incentives for investment provided by the Government through the statutory orders 
listed in the Schedule or otherwise notified shall continue in force for the term 
specified therein and shall not be altered to the disadvantage of the investors. 
7. Protection of t ransfer of o wnership to private sector.– The ownership, 
management and control of any banking, commercial, manufacturing or other 
company, establishment or enterprise transferred by the Government to any person 
under any law shall not again be compulsorily acquired or taken over by the 
Government for any reason whatsoever. 
8. Protection of foreign and Pakistani Investment .– No foreign, industrial or 
commercial enterprise established or owned in any form by a foreign or Pakistani 
investor for private gain in accordance with law, and no investment in share or equity 
of any company, firm, or enterprise, and no commercial bank or financial institution 
established, owned or acquired by any foreign or Paki stani investor, shall be 
compulsorily acquired or taken over by the Government. 
9. Secrecy of Banking Transaction .– Secrecy of bonafide banking 
transactions shall be strictly observed by all banks and financial institutions, by 
whosoever owned, controlled or managed. 
10. Protection of financial o bligation.– All financial obligations incurred 
including those under any instrument, or any financial and contractual commitment 
made by or on behalf of the Government shall continue to remain in force, and shall 
not be altered to the disadvantage of the beneficiaries.  
11. Rules.– The Federal Government may make rules for carrying out the 
purposes of this Act. 
THE SCHEDULE 
[See section 6] 
1. Notification No. SRO 1283 (1)/90 , da ted the 13 th December, 1990, issued 
under sub-section (2) of section 14  of the Income Tax Ordinance, 1979 (XXXI of 
1979). 
2. Notification No. SRO 1284 (1)/90, dated the 13 th December, 1990, issued 
under section 19 of the Customs Act, 1969 (IV of 1969).