Protection of Economic Reforms Act, 1992

This 1992 Act was designed to lock in the economic liberalisation reforms Pakistan began in the early 1990s, giving them legal protection so investors and savers could rely on them continuing. Section 2 defines "economic reforms" as the policies and laws introduced from 7 November 1990 onward relating to privatisation of state enterprises and nationalised banks, promotion of savings and investment, industrial incentives, and deregulation of banking, finance and currency systems. Section 3 makes the Act override the Foreign Exchange Regulation Act, 1947, the Customs Act, 1969, the Income Tax Ordinance, 1979, and any other conflicting law.

Section 4 gives all citizens (in Pakistan or abroad) and other persons freedom to bring, hold, sell, transfer and take foreign currency into or out of Pakistan without needing to declare it or answer questions about it -- subject to some carve-outs added later for specific categories like borrowed foreign exchange or export proceeds. Section 5 protects foreign currency accounts from tax-authority inquiry into their source of funds, and exempts their balances and income from wealth tax, income tax and compulsory Zakat deduction -- though a later amendment (effective 16 December 1999) removed this immunity for new accounts opened by resident citizens and local companies after that date.

Section 6 protects fiscal incentives for setting up industries (listed in the Schedule) from being withdrawn to investors' disadvantage during their stated term. Section 7 prevents the government from re-nationalising or taking back businesses it has privatised. Section 8 protects foreign and Pakistani private investments, including bank shares, from compulsory acquisition. Section 9 requires banks to maintain secrecy of banking transactions, and Section 10 protects existing financial obligations and contractual commitments of the Government from being altered to a beneficiary's disadvantage.

This is an important, still-current piece of economic legislation. Because it has been amended at least once (in 1999, per the extract's footnotes) to narrow the foreign-currency-account tax immunity, anyone relying on the exact scope of these protections today should verify against the current official text.