• Regrets only two million people out of 220m population pay taxes
• Says PTI keeps record of its foreign funding
ISLAMABAD: Prime Minister Imran Khan on Monday said the government was striving hard to replace cash economy with digital economy to get maximum benefit of the country’s big population to broaden the tax net.
“The 220 million people in Pakistan are used to cash economy; however, now it is time to move forward to introduce digital economy,” the prime minister said while launching the country’s first instant digital payment system — Raast.
Raast is part of Prime Minister Khan’s Digital Pakistan vision to include the poor segments of society in formal economy. It has been developed by the State Bank of Pakistan (SBP) in collaboration with Bill and Melinda Gates Foundation and Karandaaz, Pakistan.
“Raast is an accomplishment of one of the milestones of SBP’s broader strategic agenda of digitalisation and increasing financial inclusion in the country,” said a press release issued by the SBP.
It will provide digital, easy-to-use, efficient and cost-effective payment options to the users. The faster payment system will be used not only to settle small-value retail payments in real time but also provide cheap and universal access to all players in the financial industry, including banks and fin-techs.
Addressing the gathering, the prime minister termed the launch of Raast a major step forward by the SBP towards Digital Pakistan and said it would help include low-income groups and make them part of the mainstream economy.
“The instant payment system would not only document the economy but also generate more taxes to help build the country. It would go a long way in fighting poverty, particularly in the rural areas,” he added.
The prime minister regretted that only two million people in a country of 220m paid taxes, which was not enough to build hospitals and schools and provide other basic facilities of life to the common man. Only 3,000 taxpayers paid 70 per cent of the tax, he added.
Mr Khan said foreign remittances had been constantly on the rise for the past five months and helped stabilise the local currency.
After a gap of 17 years, the country’s current account has gone into surplus, lowering pressure on the rupee and playing a key role in strengthening the national economy.
The prime minister said that with an increase in revenue collection, the government would create extra space for spending on human development — education, health and clean drinking water. “Pakistan was among the top countries with the highest growth rate in the region, but today it is left behind,” he said, adding that a move towards digital Pakistan would help put the country back on track.
PM Khan said the digital payment system would help give a boost to the Ehsaas programme, particularly its mobile wallet, and extend its reach to the women in rural areas. He said his government was working for the empowerment of rural womenfolk who had been included in various economic activities.
Mr Khan extended gratitude to UN Secretary-General’s Special Advocate for Inclusive Finance for Development Queen Maxima of the Netherlands for promotion of women in financial inclusion, Bill & Melinda Gates Foundation for its support in the launch of the programme and also for polio eradication, and the World Bank for its role in the launch.
Queen Maxima appreciated Pakistan on the launch of the instant payment system, effective strategy to deal with the Covid-19 pandemic and the Ehsaas programme for women empowerment.
According to SBP data, digital payments account for only 0.2 per cent of Pakistan’s 100 billion transactions today, whereas the share of digital transactions in the peer countries ranges from 1.5pc to 7pc.
SBP Governor Reza Baqir told the gathering that the faster payment system would help spur economic growth, especially by facilitating small businesses and individuals. He said the government employees and pensioners would be able to get payment of salaries and pensions in seconds through the new system.
“It would also help curb corrupt practices and provide simple, secure and transparent transactions,” he added.
He said the Roshan Pakistan system had met with success and banks were also extending support to the people who desired to take loans for building homes.
Pakistan has had low electronic transactions due to low banking penetration, lack of trust and awareness of digital payment methods, limited interoperability, difficult accessibility and high cost of transactions. However, Raast will facilitate retail payment settlements with much great efficiency.
PM meets spokespersons
During a meeting with his spokespersons, Prime Minister Khan said former premier Nawaz Sharif had tried to buy loyalties of UK-based private assets recovery firm Broadsheet LLC.
He said the recent statement of Broadsheet owner Kaveh Maussavi regarding Nawaz Sharif had endorsed the government’s claim about his corruption.
In an interview with a UK-based web channel, Mr Moussavi had claimed that he still had evidence against the Sharifs and several other Pakistanis. He said the reason Broadsheet LLC did not pursue the Avenfield case was “because we found other money in the Pakistan government’s accounts”.
The prime minister asked his spokespersons to highlight details of foreign funding case against him and Pakistan Tehreek-i-Insaf. “PTI is the only political party which keeps record of its foreign funding; even the PPP has no such record,” he claimed.
Mr Khan also asked them to highlight achievement of the government and vehemently confront the opposition leaders in the media.
Published in Dawn, January 12th, 2021