Experts Demand Tax Relief to Boost E-Commerce in Pakistan

E-commerce offers huge scope and potential for Pakistani markets. The right policy reforms and facilitation by the government could play a key role in tapping this potential.

Representatives from the public & private sector and civil society organizations said this while sharing their views with the participants at ‘E-commerce-the scope and facilitation’ organized by the Sustainable Development Policy Institute (SDPI).

Hussan Bano Burki, Chief of Party at USAID supported Pakistan Regional Economic Integration Activity (PREIA), said that timely implementation of e-commerce policy could enable the Pakistani market to benefit from the opportunities in the digital space available to local and foreign firms.

Ms. Burki said that we need to strengthen the spirit of public-private dialogue to reach a better understanding of diverse perspectives and to have a shared vision for e-commerce reforms that are required.

Dr. Vaqar Ahmed, Joint Executive Director, SDPI, was of the view that the E-commerce industry in Pakistan has witnessed over 90% growth in 2019. However, total sales in this sector remain low compared to other contemporary economies. He said that experts are suggesting that COVID-19 has presented an opportunity for e-commerce enterprises provided the government facilitates the e-commerce sector.

He added that people still have trust issues while making online payments. He said that a complex tax regime is a barrier to the growth in the sector and new firms that venture into it. Currently, all provinces have a different GST regime which results in multiple layers of taxation and thus, hurt the taxpayer, he added.

Aisha Moriani, Joint Secretary Ministry of Commerce (MoC), informed the participants that an e-commerce policy has been approved by the Cabinet and the ministry is now working with the e-commerce industry stakeholders for timely implementation of the policy.

She said that this policy is aimed at bringing the cost of doing business down for e-commerce firms. She added that e-commerce initiatives will help export enterprises better connect with the rest of the world through online marketing and financial channels.

Gonzalo Valera, Senior Economist at World Bank, said that World Bank is keen to help the Ministry of Commerce with e-commerce reforms. Pakistan has one of the lowest internet penetrations which is hindering it in the achievement of potential e-commerce gains, he observed.

Afnan Khan from the Federal Board of Revenue (FBR) informed the participants that FBR is making efforts to expedite the implementation of Pakistan National Single Window which is a commitment under the International Trade Facilitation Agreement. FBR is expecting that an initial version of National Single Window will be launched by December 2020, he said.

Asfandyar Farrukhi, Managing Director of HUB Leather, was of the view that changes in tax code take place very frequently. Therefore, he said, we need to make digital payments cheaper. Zeeshan Shahid, CEO of TIE Pakistan said that we need to incentivize formal and informal retailers to come online.

Pervez Iftikhar, Member of Prime Minister Taskforce on IT Sector, said that taxes on the use of the internet are unfair and any tax levied on the online or web-based activity should be in line with peer economies.

Aamir Ibrahim, CEO Jazz, Badar Khushnood from Pakistan Software House Association, Syed Junaid Imam CEO IGNITE, Ministry of IT and Telecom, Iftikhar Qutab Advisor Khyber Pakhtunkhwa Revenue Authority and Mona Mahfooz from Sindh Revenue Board also highlighted the diverse aspects of the challenges and opportunities for e-commerce in Pakistan.