ISLAMABAD: Pakistan has decided to establish electronic data interfaces with different countries including the United Arab Emirates, European states, Afghanistan, Hong Kong and Singapore to curb under-invoicing and tax evasion, officials said on Thursday.
The government has been struggling to combat incorrect declaration and under-assessment of goods by importers to evade customs duty. Importers usually change invoices in the connivance with government officials to pay minimal taxes while clearing their consignments from ports.
“The under-invoicing and tax evasion by importers run into millions of rupees annually and we want to curb it by coordinating other countries,” Dr. Hamid Ateeq Sarwar, Member Inland Revenue Policy at the Federal Board of Revenue (FBR), told Arab News.
Elaborating the plan, he said the electronic data interface with Afghanistan will be established by February this year and the project will then be extended to other countries as well in different phases.
“We don’t expect much to gain from Afghanistan as they don’t have the capacity to handle the imports and exports, but at least we will be able to find difference in invoices of importers if any of them attempts to alter them,” he said.
Sarwar said the FBR was planning to complete the project with the UAE, European countries and Singapore by June this year. “Once we are connected with the electronic data interface of a country, it will be almost impossible for importers to alter their invoices,” he said.
The cash-strapped South Asian nation has been struggling to increase its tax revenues by combating smuggling and under-invoicing by importers.
The country has suffered an economic loss of around $11 billion in terms of customs duties and withholding tax during 1972 to 2013 as the under-invoicing was recorded to be around $92.7 billion during the period, according to Mukarram Jah Ansari who is director-general valuation at the FBR.
Pakistan has been working closely with the World Customs Organization, an intergovernmental body headquartered in Brussels, Belgium, to sign agreements with other countries for electronic data interchange.
“We have been receiving very encouraging response from all the countries … numerous international organizations have been helping us to reform our tax system,” Sarwar said. “In today’s age, all the countries have open economies and it is in their interest as well to sign such mutual pacts.”
On the other hand, importers and businessmen have welcomed the move, hoping it will help discourage smuggling of the goods and boost genuine imports and business in the country.
“Once the smuggling and under-invoicing of the imported goods is stopped effectively, we will witness a competition among genuine importers which will boost the economy and increase revenue collection,” Anjum Nisar, chairman Pakistan Fast-Moving Consumer Goods Importers’ Association, told Arab News.
Pakistan to coordinate with UAE, Europe to curb under-invoicing, tax evasion
https://arab.news/6cxbs
Pakistan to coordinate with UAE, Europe to curb under-invoicing, tax evasion
- The project will make it ‘almost impossible’ for importers to alter invoices, say FBR officials
- Importers welcome the move, saying it will boost economy and increase tax collection
Pakistan courts Chinese fintech investment as digital push widens
- Fintopia delegation explores digital lending, SME finance opportunities in Pakistan
- China’s vast fintech ecosystem contrasts with Pakistan’s fast-growing, underbanked market
ISLAMABAD: Pakistan is seeking to attract Chinese fintech investment as it accelerates a broader push to expand digital finance, improve access to credit for small businesses and modernize its largely cash-based economy, the information ministry said on Thursday.
The move was underscored during a meeting in Islamabad between Federal Minister for the Board of Investment Qaiser Ahmed Sheikh and a delegation from Fintopia China, a financial technology firm exploring potential entry into Pakistan’s digital finance market. The outreach comes as the government places increasing emphasis on technology-led growth and foreign investment, particularly in financial services, amid efforts to boost financial inclusion and support small and medium-sized enterprises. Pakistan has in recent years expanded branchless banking, digital wallets and mobile payment systems, while also rolling out regulatory reforms aimed at improving the ease of doing business.
Fintopia is a China-based financial technology group that operates digital lending and consumer finance platforms across several emerging markets, according to company information. China hosts one of the world’s largest fintech ecosystems, driven by mass adoption of mobile payments, digital credit and data-driven financial services, while Pakistan’s fintech sector, though far smaller, has grown rapidly as smartphone use rises and demand for digital financial services expands.
“The delegation expressed keen interest in initiating its digital financing venture in Pakistan and in exploring structured collaboration with relevant public and private sector stakeholders,” the information ministry said, quoting minister Sheikh.
The meeting between Sheikh and the Fintopia China delegation took place in Islamabad and followed the company’s participation in a Pakistan-China business-to-business investment conference held in Beijing in September during Prime Minister Shehbaz Sharif’s visit to China, according to the ministry.
During the talks, Pakistani officials highlighted the country’s market potential, noting that Pakistan is the world’s fifth most populous nation and presents growing opportunities for digital financial services, particularly for small businesses and youth-led enterprises. The delegation was briefed on government reforms, including the Business Facilitation Center and the Asaan Karobar Act, aimed at reducing regulatory hurdles for investors.
Officials also outlined investment incentives available in Pakistan’s special economic zones and reiterated government support for foreign companies seeking to launch pilot projects or long-term digital financing operations in the country, the ministry said.
Pakistan has repeatedly described technology and digital finance as central to its long-term economic strategy, as it seeks to widen the tax base, formalize the economy and improve access to credit for underserved segments of the population.
