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ISLAMABAD: With the unveiling of new taxes on digital transactions and e -commerce in the budget, the government has moved towards the safety of domestic retailers, but ETS is compromising on its vision to encourage cashless economy.
Pakistan’s Chairman Telecom Operators Association, Aamir Ibrahim, expressed both hope and concern in a tweet, warning that these measures could reduce the journey toward Pakistan’s cashless economy.
On the other hand, the leaders of the telecom and IT industry expressed concern that the Prime Minister’s Office was preparing a vision for the cashless economy, but the budget disappointed them.
He pointed out that many major retailers refuse to accept digital payments to hide real income and avoid taxes, which shows that the implementation of such methods is insufficient. He says the vacuum allows to maintain tax evasion and disrupts efforts to bring more transactions to the formal, documentary economy.
The Pakistan Software Houses Association (P -SHA) has also expressed frustration, warning that neglecting key demands from the IT sector and introducing conflicting tax policies can prevent exports from increasing exports, could endanger jobs, and send a global investment to Pakistan.
Likewise, overseas investors Chamber of Commerce and Industry (OICCI) also criticized the government for losing an important opportunity to expand the tax base and document the country’s wide -run cash -based informal economy.
In a statement, the OICCI noted that while the e -investing nationwide rollout and the expansion of the POS system are positive measures, the absence of concrete strategies to tackle the informal sector and the tax structure to further invest in the friendly environment and advance.
Aamir said, “The purpose of the budget is to formulate online trade through digital integration and tax measures, which is a plus.” “However, the complexity of tax collection, 5 pcs on digital transactions with foreign shopkeepers, and the risk of increasing the additional tax costs received by payment and discouragement of digital adoption. Digital payments are more essential, easier, easy, and cheap.
The New Finance Bill introduces taxes on both local and foreign e -commerce markets, which makes it expensive online shopping for Pakistani consumers. In particular, goods purchased from foreign online markets will be imposed 5 pc tax, such as Alexpress and Amazon, which has been deposited at the site of the transaction through banks and payment gateways.
Meanwhile, local digital payments will face, which is from 1pc to 2PC in terms of transactions, and courier companies will receive tax on cash on delivery payments.
Banks and courier services have been named as withholding agents, needed to collect and remind these taxes, and enter detailed statements on all digital transactions. Online markets also have to ensure that all shopkeepers are registered for sales tax, which is tough in the entire sector.
Aamir acknowledged the government’s intention to bring more online activity into the formal economy, but warned that additional complexity and cost could withdraw some businesses and consumers to cash and informal channels. “We need to maintain a balance between expanding the tax net and promoting digital inclusion. If digital transactions become more expensive or burdensome, we are at risk of harming the progress made in financial inclusion and digital change.”
