Leaders of the telecom industry in Pakistan are urging for greater promotion of digitalization and the use of digital payments to formalize the country’s economy. In a report released by the Pakistan Business Council titled Agenda for the incoming government, industry leaders highlighted the need for policy reforms to incentivize the shift from cash to digital payments. Jazz CEO and Telecom Operators’ Association of Pakistan Chairman, Aamir Ibrahim, emphasized the urgency of these reforms, noting their potential to improve access to education, healthcare, finance, and other essential services for the people of Pakistan.
Ibrahim further suggested that reducing the withholding tax (WHT) from 15% to 8% would make essential telecom and internet services more affordable and encourage wider adoption of broadband, especially among low-income groups. Currently, Pakistan’s telecom market is burdened with a 34.5% tax, including a 15% WHT and 19.5% GST, making it one of the most heavily taxed telecom markets globally. These high taxes hinder accessibility for the country’s more than 190 million telecom users.
The telecom industry believes that by incentivizing digital payments and reducing taxes, Pakistan’s economy can experience greater formalization. This transition would not only provide convenience and efficiency but also generate a wealth of data that could contribute to economic planning and development.
The push for digitalization aligns with global trends as various countries strive to create cashless societies and promote digital financial inclusion. It enables individuals to have secure and traceable transactions, paving the way for enhanced transparency and accountability in the economy.
Furthermore, promoting digital payments would address several challenges faced by the Pakistani population. With increased access to digital financial services, individuals will have better opportunities to save, invest, and access credit, fostering economic growth and reducing poverty. The widespread adoption of digital payments can also contribute to the government’s efforts to broaden the tax base, ultimately increasing revenue for investments in vital sectors such as education, healthcare, and infrastructure.
The telecom industry’s recommendations emphasize the need for a conducive policy environment that supports and enables digitalization. By reducing taxes, particularly the WHT, the cost of essential telecom and internet services would be more affordable, allowing a wider range of individuals to participate in the digital economy. This, in turn, would help bridge the digital divide and empower marginalized communities.
As Pakistan moves forward in the digital age, the telecom industry’s call for promoting digitalization and incentivizing digital payments reflects a shared vision for progress and economic development. The shift towards a cashless economy has the potential to revolutionize how transactions are conducted, transforming the lives of millions and propelling Pakistan towards a more prosperous future.
