ISLAMABAD: The Pakistan government has changed foreign exchange regulations to facilitate investors and protect their capital with tax incentives for ten years in special technology zones that aim to boost digital transformation in the next two years, a top government official said on Monday, saying a billion-dollar fund was in the works.
“We have gotten ten venture capital funds now finally ready to come to Pakistan,” Amer Hashmi, chairman Special Technology Zones Authority, told Arab News on the sidelines of a policy roundtable -“Connecting Pakistan: Covid-19 Lessons for Digital Policy” - organized by policy think tank Tabadlabb in Islamabad. “The state may think about going fifty-fifty with them, and create the first billion dollar fund.”
Talking about the importance of digital transformation and special technology zones, Hashmi said the government was pushing it to create job opportunities and boost revenue.
“The government doesn’t have cash; we will have to do this to generate more revenue and employment,” he said, adding that digital initiatives would be accelerated in the next two years as Prime Minister Imran Khan was himself supervising the digital transformation process.
While Covid-19 has been a catalyst in accelerating Pakistan’s digital transformation, there is a critical need for strategic reforms and a change in the mindset of the government to sustainably capitalize on the country’s potential, other panelists at Monday’s event said.
Irfan Wahab, chief executive officer at Telenor, said global demand for digital access during the COVID-19 pandemic and solutions to overcome obstacles had increased manifold, but the opportunity was not adequately captured in Pakistan due to suboptimal government support and industry preparedness.
He said in many other countries, government regulators had expanded the spectrum during the pandemic emergency to allow smoother access for citizens to high-speed mobile internet.
“In Pakistan, similar requests were not entertained by the government whose focus remained only on maximizing revenue from spectrum sales,” Wahab said.
Talking about the need for policy interventions, Jazz CEO, Aamir Ibrahim said “we are never going to think about the future" if the government only remained fixated on how to milk telecom companies for taxes.
“This is the inherent disconnect between the three key stakeholders: the investors or operators, the governments, and the end-users, who want the best service for free,” he said.
High taxes were one of the major obstacles to more rapid adoption of fin-tech and digital payments despite great initiatives such as the government’s instant payment system Raast, Tez Financial’s co-founder Naureen Hayat said.
“Cash from a customer’s perspective is still cheaper than digital,” she said. “This perception comes as a result of taxes and extra charges.”
