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Hours after a memo stated ride-hailing services Uber and Careem are "illegal", Chairman of the Punjab IT board Umar Saif said the approach is being "reviewed".
Read more: Punjab govt moves to ban Careem and Uber
"This is being reviewed within the government," Saif told Dawn.com in a telephone interview, when asked if the companies will be "banned" in Punjab. "We are coming up with a formal policy. This letter was an internal memo and has prematurely been made public."
Although he said both Uber and Careem currently do not pay tax in Pakistan, Saif said the Punjab government is tackling the issue with an "innovative business model".
"There are two ways that a government can approach such companies when they launch: 1) treat them as a taxi service or 2) treat them as a service that government’s can regulate."
"We don’t want to treat them as a taxi service," Saif added. "But they need to be regulated and taxed. They must register as a formal business under a new taxation regime."
When asked to share details on the new plan, Saif said it will be modelled around taxation regimes for such companies in Malaysia, Egypt and Indonesia where they are treated as "network service providers".
‘Careem, Uber good for Pakistan’
The letter of the Provincial Transport Authority appears to have taken Saif, a cabinet member of the Punjab government, by surprise.
"We brought them to Pakistan with a lot of effort and the conversation had been going on from the start. We asked them for a proposal. They’ve had extensive meetings with the transport department and provincial authorities."
He said he feels the companies are "great for places like Pakistan because we don’t have much of a transport structure".
"They create employment… they are a great monetisation channel and also take rides off roads due to ride sharing because roads are congested."
He said he takes pride in the launch of the Uber Rickshaw service, as rickshaw drivers now have an opportunity to be a part of the formal economy.
So what’s next? In Saif’s words: "The government is taking a balanced approach. We want to come up with a new taxation policy, that helps people gets jobs but also regulates the industry."
Read more
On DawnNews
Comments (35) Closed
Jan 31, 2017 05:36pm
If this ban is imposed; thanks to METRO.
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Jan 31, 2017 05:45pm
Where is public transport??? Metro is a window dressing nothing else !!!
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Jan 31, 2017 05:56pm
Me: Can I get a reasonable transport system from the money I pay as tax
Gov: No
Me: Can I get this service privately from my own pocket
Gov: No, until gov gets a piece of cake (Jiye Metro/Jiye Bhutto)
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Jan 31, 2017 06:02pm
Sensible approach. I suppose babus at transport department were in a hurry for no reason or under pressure from private taxi/transport companies. Having said that - Uber/Careem must be brought into tax regime. No compromise on that
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Jan 31, 2017 06:22pm
Only a stupid will compare Metro with Uber or Careem.
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Jan 31, 2017 06:22pm
the only reason to ban is to get money out of the business. due to careem and uber metro business is down. this government is corrupt from the core. they want people to use metro.
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Jan 31, 2017 06:24pm
We just want Careem and Uber to continue providing us cheap car hailing services. The government is after the tax money which it will never spend on us anyway and would keep in its own pockets. Shame on Punjab and Sindh governments. Taking taxes from Careem and Uber only becomes of use when the rulers are clean themselves which they are not because they just can't provide the money trail. They will take this tax money to Qatar too without any money trail!
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Jan 31, 2017 06:33pm
Hope, Punjab govt will not ban these reasonable taxi services as Roksha & local taxi services are below standard any way.
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Jan 31, 2017 06:40pm
Why should they pay tax? Are their competitors paying tax? Can they give details of rickshaw,chingchi and bus owners paying tax? How come someone charging 15/km for ride on new AC car and also paying 30% to middleman, earns more than the one charging 2o/km on rundown non AC rickshaw? If the tax is for the middleman, the "middleman" for rickshaw and buses should pay as well. Everyone know the later middleman.
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Jan 31, 2017 07:00pm
Any service which gives some relief to the general public...without Punjab government getting commission/favors/kickbacks is deemed as unfit and banned.
Little did they know, politically this is damaging to ruling government as well. There was a report that it is also done to favor Al-Bayrak A-taxi, a Turkish company with business interests of the rulers, or partners.
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Jan 31, 2017 07:35pm
Nothing is allowed in Punjab without kickbacks and Commissions.
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Jan 31, 2017 07:49pm
Wake-up Punjab.....
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Jan 31, 2017 07:44pm
@The end is near right on
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Jan 31, 2017 08:11pm
It is appreciable that Punjab takes its decisions in the interests of the people of the province. We do hope the other provincial governments would also take independent decisions in the interests of their respective provinces.
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Jan 31, 2017 08:21pm
The problem lies in that Act and not in this sector.
The best thing the government can do is stay out of it. Without regulation this sector has thrived. Regulation is cancer for innovation and entrepreneurship. The government should be looking for ways to remove red tape instead of adding to it.
Govt will be better off refining IP laws, which encourage innovation than adding red tape and regulation. What is their motivation for scrutinizing a sector which is providing so much employment, and seems to be working smoothly.
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Jan 31, 2017 08:55pm
@Sami muscat I do endorse it
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Jan 31, 2017 09:39pm
this ban shows how govt denies any public relief ..
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Jan 31, 2017 09:45pm
@KK I completely disagree with your stance. Innovation without Regulation and abiding Law becomes more fatal that can ever be imagined.Our Nation is not meant for making money by exploiting their ignorance poverty while playing with their psychology and on becoming ill, individuals are being experimented under the Umbrella of Treatment gathering data to add up to publications of few individuals to enjoy locally financed international trips, money authority fame networking for more and more and even more whereas its always the Nation that has been on suffering one way or other.Other countries have regulatory check point whereas we lack regulations whereas majority of us are CHEATERS.
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Jan 31, 2017 09:54pm
They shout give a percentage to the Powere-to-be.
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Jan 31, 2017 09:52pm
Usually, if our politicians and local authorities are unable to receive money cut that business becomes illegal or not allowed. Government and politicians are not interested helping public their transportation issues at all. It is up to public to demand their rights
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Jan 31, 2017 10:39pm
Umar saif seems competant and educated. Good for next pm
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Jan 31, 2017 10:50pm
No reasonable education facilities, poor standard of health and hospitals, third class means of transport and so on. Why are we making motorways,bridges, roads, under/over passes for tongas and carts? Let the common man travel on the roofs of broken busses. May God grant us some wisdom and common sense and take away the instinct of corruption from us.
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Jan 31, 2017 11:33pm
To all those guys saying why taxing these companies, I mean, are you insane? Why shouldn't they? This sector has to be taxed. Look at YouTube, Google, and other information technology companies which are making like millions for us without paying a dime in taxation.
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Jan 31, 2017 11:41pm
Banned. not banned. banned. not banned. No wonder the country is so dysfunctional. no one has a clue.
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Feb 01, 2017 01:34am
But they have to pay taxes in Pakistan, PERIOD!
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Feb 01, 2017 01:58am
Finally some sense.
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Feb 01, 2017 02:01am
@BAXAR : Careem, Uber, and all their vendors should pay income taxes. As for the rickshaw wala and the taxi wala they will soon go into oblivion.
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Feb 01, 2017 02:11am
@Princess_of_DHUMP ... They want to tax the drivers.
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Feb 01, 2017 06:44am
You cant even regulate the countless rickshaws and chinchees running all around and ripping off peoples money with no rule for charging fare and suddenly you came to regulate these services which are far far cheap and comfortable to middle class men.
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Feb 01, 2017 08:26am
Mismanagement of the government again
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Feb 01, 2017 10:20am
Laws are always made and enforced to the benefits of people. Existing laws related to Transport are mere bureaucratic and are of no benefits to the people or transporters. No vehicle fitness is being enforced, no public safety. Before these services were introduced, this business was monopolized by few big business owners like Metro Cab, Daewoo Cab and Albayrak cab. After introduction of Careem and Uber business of those existing cab services is being hurt. Government is just protecting the business interests of these big businesses and that is why so keen and eager to implement and enforce such law otherwise why govt had never been keen to implement such laws on existing cab services.
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Feb 01, 2017 01:05pm
@Just Someone "Careem, Uber, and all their vendors should pay income taxes." How many people pay tax on rent earned from private properties? These cars are also private properties on rent. For one category (rich) you devise tax amnesty, and you impose tax on the other (poor), although they earn exactly the same way. First regulate the most expensive rented properties, then watch the famous "trickle down effect". Uber and Careem are at a crossroad. Close their business immediately, or make customer pay the bribe to regulators. It's the choice between 100 onion and 100 lashes. Better close the shop, Pakistan cannot digest progress, no need to force it.
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Feb 01, 2017 02:57pm
@BAXAR : I wish you had read my comments carefully. I mentioned vendors paying "income tax" not withholding tax or a presumptive tax based on revenue. The "income tax" is payed by all salaried class and is paid only when earn enough for your income to be taxable. Coming back to Careem, hardly any driver will earn more than 400,000 to be in the taxable bracket. As for the vendors who are renting single cars only, their annual incomes will also be less than the taxable income. However, those with multiple cars will fall into higher income brackets and will pay income tax as such.
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Feb 02, 2017 08:07pm
this was expected, the same thing happened in America when first the services started, so its normal when some people see threat to their businesses.
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Feb 03, 2017 01:31pm
@Just Someone " I mentioned vendors paying "income tax" not withholding tax or a presumptive tax based on revenue. " That applies to all, especially to those collecting it. The fact that you mentioned a precise category, changed the sense of your comment. Otherwise we understand each other.
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