ISLAMABAD: Prime Minister Imran Khan has warned those not paying taxes despite, living a luxurious lifestyle that the government would reach them through use of technology as increasing tax-to-GDP ratio is critical for the country.
Addressing the launching ceremony of Pakistan’s first instant payment system “Raast” on Tuesday, the prime minister regretted that Pakistan’s tax-to-GDP ratio has been dismally low and there is a dire need to increase it and for this purpose technology is being introduced in the Federal Board of Revenue (FBR).
The premier said that 220 million people of any country can only be great strength for it, if they are involved in the formal economy otherwise, they would become a liability. Digital Pakistan, he said, is a journey in the direction to make the 220 million people asset of the country by including them in the formal economy.
He added that he would judge his success after completion of five years in 2023, on one point that has he been able to reduce poverty, if so then it would be his big achievement. The premier also referred to the Khyber-Pakhtunkhwa province and stated when his party came to power in the province in 2013; the province was worst affected by war on terror. However, after five years, the PTI won the province with two-thirds majority for the second term primarily because of reduction in poverty in the province and this was also mentioned in the UNDP report.
SBP introduces Raast instant payment system
While referring to corona, he said that during Covid all the countries have experienced poverty; however, World Bank report stated that poverty in Pakistan was marginally decreased. The prime minister said that instant payment system of “Raast” would facilitate the common man by providing them access to their account thorough mobile phone besides it would bring the people in the formal economy and thereby saving to GDP ratio would increase.
He said that there is need to increase tax-to-GDP ratio for the development of the country by involving more and more people in the formal economy. He regretted that only two million people, out of 220 million, have been paying taxes, whereas, the government survey shows that a huge number of the people are living a luxurious lifestyle but are not paying taxes. I would like to warn them that the government would reach to them through technology, he added.
The premier also directed the State Bank of Pakistan (SBP) governor to set up a cell in the central banks for doing continuous research to provide facilities to the overseas Pakistanis as he has been receiving continuous complaints from them with regard to problem being faced by them in sending remittances. Nine million overseas are the biggest asset of the country as they not only remit remittance but also contribute to foreign exchange reserves, he added. The prime minister said that Raast would be used for ration program.
Earlier, Governor SBP Reza Baqir said that Raast is a digital payment system, which will help in making online payments. Baqir said that this digital payment system is used in only few countries of the world and even the United States does not use digital banking system yet.
He further stated that $500 billion E-banking transactions have taken place with 30 percent growth and this is higher compared to Pakistan GDP of $370 billion. He said that there huge number of mobile uses but half of them are having accounts, which shows that here is a huge potential of the people to have mobile phone banks accounts
There are four salient feature of Raast with the first one, this is a much faster and quicker payment system than cash while other important thing is that the transaction is absolutely free, and the third important point is that the SBP facilitated direct payments, and the fourth important point is that customers are at the forefront. If you are not happy with your bank, you can change your bank account and link directly to another account by de-linking, so that you can use another bank’s service. He said that five licenses would be issued to five institutions.
Finance Minister Shaukat Tarin said that it will help increase saving to GDP ratio, which is critical for sustainable growth. He said that this will revolutionise the growth of IT, according to experts because the design of the application is the responsibility of IT. He said that the government would launch three to four more initiatives in the next 10 to 15 days to help the low-income group against inflation.
Copyright Business Recorder, 2022