Latest news with #RAAST
Business Recorder
4 days ago
- Business
- Business Recorder
12 cities nationwide: JazzCash facilitating QR-based payments at 27 cattle markets
ISLAMABAD: JazzCash is facilitating QR-based payments at 27 cattle markets across 12 cities nationwide -- initiative replaces traditional cash transactions with seamless digital payments, ensuring safety, transparency, and convenience for cattle farmers, merchants, and buyers alike. Following its success last year—facilitating the most widespread interoperable RAAST QR digital payments campaign and contributing over one-third of all QR transactions in the industry—JazzCash is once again enabling secure, efficient, and cashless transactions during this Eidul Azha season. In line with the State Bank of Pakistan's vision to promote digital financial inclusion, JazzCash is facilitating QR-based payments at 27 cattle markets across 12 cities nationwide. This initiative replaces traditional cash transactions with seamless digital payments, ensuring safety, transparency, and convenience for cattle farmers, merchants, and buyers alike. The project aims to integrate rural and semi-urban communities into the digital economy, expanding access to essential financial services and fostering economic empowerment. Adding to its innovative offerings, JazzCash has partnered with Saylani Welfare Trust to launch a digital Qurbani service through the JazzCash app. This service allows customers to conveniently select their preferred Eid day and pickup location or opt to have the meat distributed on their behalf, making the Qurbani process more accessible and hassle-free. JazzCash hosts over 22 million RAAST IDs and an extensive network of more than 535,000 merchants. The platform facilitates the digitization of over PKR 20 billion in QR transactions every month, underscoring its pivotal role in driving the adoption of RAAST payments and advancing Pakistan's fintech landscape. 'JazzCash is committed to empowering communities by making digital payments accessible, secure, and convenient. Our initiatives during this EidulAzha season reflect our dedication to financial inclusion, helping Pakistanis embrace the benefits of a digital economy,' said Khayyam Siddiqi, Head of Communication, JazzCash. JazzCash, Pakistan's leading fintech platform serving nearly 50 million customers, continues to spearhead the country's digital payment revolution, he added. Copyright Business Recorder, 2025
Business Recorder
5 days ago
- Business
- Business Recorder
Recommendations for cashless economy
EDITORIAL: An expert committee on cashless economy, with representatives from the public and private sector, proposed enforcing the use of RAAST QR code, by empowering district administrations to accept digital payments at all retail outlets. RAAST created in 2021 is fully owned by the State Bank of Pakistan (SBP) and offers instant, reliable and digital payment services to the public with the objective of promoting the adoption of digital financial services — an objective that would bring greater numbers into the formal economy. QR codes are used to display text to the user, open a webpage on the user's device, add a vCard contact to the user's device (an electronic business card) to open a Uniform Resource Identifier (a string of characters that uniquely identifies an abstract or physical resource like a website, an email or a book) to connect to a wireless network (which requires wider availability of Wi-Fi than exists in Pakistan today). After the launch of RAAST bulk payments, SBP introduced person-to person fund transfers and settlement services with bank customers able to send and receive payments using the bank's mobile services, internet banking or over the counter services. However, use of RAAST would necessitate having a bank account and one would hope that the rather stringent rules for opening an account are relaxed. The proposal envisages RAAST QR codes be mandatorily installed at all government payment points within six months to create digital wallets for all government disbursements. The beneficiaries of Benazir Income Support Programme (BISP) access their Kafalat quarterly payments through cash cards provided by partner banks. However, there are a significant number of beneficiaries unable to directly withdraw their disbursements due to inability (attributed to illiteracy) to use cards which, in turn, accounts for their engaging others at a fee which, no doubt, prompted the committee to suggest that these payments should be made digitally. One would hope that RAAST QR codes would make the beneficiary easily purchase items on the market though it may take more than the envisaged six months to a year for very small retail outlets especially those in the rural areas to use RAAST QR code. The committee pointed out that merchants charge 1.5 percent on credit cards and one percent on RAAST and with the informal economy estimated at 35 percent, the committee proposed that sales tax must be reduced on digital payments from 18 percent to 5 percent along with a three-year tax audit break for digital transactions. The committee wisely suggested that the government must favour incentives to punishment as the latter has not worked. Be that as it may, the audit break would apply to the upper income earners of the populace while the hundreds of thousands of Pakistanis who operate under the radar and do not have bank accounts may not be able to benefit from this feature of the proposal. The committee also acknowledged that SIM blocking will reduce access to RAAST (in practice for non-filing of income tax returns, issues of expired and/or stolen NICs) and urged the government to make the 4 percent withholding tax adjustable rather than a minimum tax; and remove 10 percent advance tax on filers with non-filers liable to pay 75 percent as it raises costs and capital expenses. And finally, the withholding tax under Section 236 was raised from 10 to 15 percent in the 2021 supplementary finance act which applies to tax filers, the industry points out, though the bulk of telecom clients are non-filers. To conclude, one can support the proposals; however, one would hope that allied reforms pre-date the committee suggestions, including ease of opening bank accounts, and reforming the tax structure by reducing the existing heavy reliance on indirect taxes, which are passed onto consumers, to direct taxes based on the ability to pay principle as well as taking account of the genuine needs of all productive sectors. Copyright Business Recorder, 2025
Express Tribune
5 days ago
- Business
- Express Tribune
Cashless economy at crossroads
Listen to article As Pakistan's informal economy swells to $140 billion, Prime Minister Shehbaz Sharif faces a choice between incentivising people by offering lower taxes to encourage digital payments or imposing higher costs on cash transactions for government payments and utility bills. An expert committee on the cashless economy, made up of public and private sector representatives, recently submitted recommendations to the PM. Their approach centres around a "carrot and stick" policy. If the PM chooses incentives, he will have to lower sales tax and petroleum levies. But if he opts for penalties, people will pay more when making payments to the government or buying fuel and other utilities. Finance Minister Muhammad Aurangzeb is set to announce the new budget on June 10. It will be clarified whether the government will focus on incentivising digital payments or punishing cash use. Previous punishment policies targeting non-filers with higher taxes have failed to deliver results. "It is up to the government whether to incentivise digital payments or punish cash users," said a committee member in background talks. The committee offered four key recommendations, presenting both options to the government. The first calls for mandating acceptance of digital payments by empowering district authorities to enforce the use of the RAAST QR code — an instant payment method — at all retail outlets. Local authorities should ensure the presence of RAAST QR codes and penalise merchants for inactivity. The committee expects that within a year, one million active RAAST QR codes could be operational if enforced effectively. "The solution lies with QR codes, not credit cards," said a committee member. "There are only 2 million credit cards and 50,000 card readers, but Pakistan has five million retail outlets." Merchants charge 1.5% fees on credit card payments, but only 1% on RAAST payments, the member added. The committee estimated that the informal economy makes up 35% of the economy, translating to $140 billion today. The government must choose to incentivise or punish, but past experience shows punishments don't work. One major recommendation is to reduce the sales tax on digital payments from 18% to 5%, along with a three-year tax audit break for digital transactions. The committee also proposed eliminating customs duties on digital payment-related equipment. They believe these incentives could double digital transactions within six months. When the committee approached the Federal Board of Revenue (FBR) about tax cuts, the FBR said the International Monetary Fund (IMF) would oppose it. However, the IMF told the committee it had no objection and threw the ball back in FBR's court. On the punishment side, the committee suggested making cash payments more expensive. They recommended imposing a surcharge on over-the-counter government payments, capping cash-on-delivery payments, and removing sales tax incentives on cash-on-delivery. One punitive proposal is to increase petrol prices by 1% or Rs3 per litre for cash payments. With 12,000 petrol stations nationwide and 70% of customers on motorcycles, this could be a significant deterrent. The committee believes the punishment policy could cut cash circulation by 2% of GDP, about Rs2.6 trillion. It also suggested that all government paymentssuch as those to Benazir Income Support Programme (BISP) beneficiaries or contractorsshould be made digitally. This would require mandatory installation of RAAST QR codes at all government payment points within six months and creating digital wallets for every government disbursement, starting with BISP. If successful, this could add 20 million new bank accounts within 18 months, the committee said. The government introduced the non-filer category in 2013 to broaden the tax base. However, over 12 years, it has become a tool to extract higher taxes rather than expand the base. Utility bills are also being used to collect taxes, hurting sectors like telecommunications. The telecom industry demands exemption from withholding tax deductions, similar to the banking sector. Telecom companies face deductions on thousands of transactions, such as electricity bills for cell towers. This raises compliance costs and administrative burdens. Verifying tax claims on these bills is also difficult for authorities, adding to the operational load. The industry argues withholding tax on telecom services should not be treated as a minimum tax, which applies even during loss-making years. Current harsh recovery measures disrupt business and undermine taxpayer confidence. CMOs pay advance or withholding tax on hundreds of thousands of transactions, including electricity bills and imports. Maintaining documents and handling audits demand significant effort and cause verification issues. They want the 4% withholding tax on telecom services to be adjustable rather than a minimum tax. The shift from adjustable income tax to minimum tax has effectively turned income tax from direct to indirect, the industry said. The sector also demands removal of the 10% advance income tax on auctions or renewals of telecom licenses. This advance tax raises business costs and capital expenses, hindering 4G/5G expansion and rural coverage. Further, the telecom sector wants the 75% advance tax on non-filers abolished, along with measures like SIM blocking, which have not produced meaningful results. Operators would need costly and time-consuming billing system upgrades to manage two tax rates. Since telecom services are essential, SIM blocking could deprive people of basic access. In April 2024, mobile operators were ordered to block SIM cards of over 500,000 non-filers. The Finance Act 2024 increased the advance income tax rate for non-filers to 75%. Additionally, non-compliance carries penalties of Rs50 million for the first offence and Rs100 million for subsequent violations. These punishments have failed, with the FBR shifting responsibility onto others. The withholding tax under Section 236 rose from 10% to 15% in the 2021 supplementary Finance Act. It applies only to tax filers, yet most telecom consumers are non-filers. The industry wants this rate reduced to 12.5% in the next budget.
Express Tribune
31-01-2025
- Politics
- Express Tribune
2.9m Afghan nationals residing in Pakistan
ISLAMABAD: The Chief Commissioner for Afghan Refugees apprised the Standing Committee on States and Frontier Regions (SAFRON) of the Senate that approximately 2.9 million Afghan nationals were currently residing in Pakistan, of which 1.4 million were registered while 0.7 million were unregistered. The Chief Commissioner presented the empirical data on Afghan refugees during the SAFRON Committee meeting on Friday, chaired by Senator Jan Muhammad Buledi at the Parliament House. The commissioner gave a comprehensive briefing on the current humanitarian assistance being provided to Afghan refugees in Pakistan, covering areas such as shelter, food, water, sanitation, education, and healthcare. The Committee members were further briefed on the Refugee Affected and Hosting Areas Programme (RAHA). They were informed that development projects under RAHA were halted in 2024 due to a lack of funding. Senators Saadia Abbasi and Syed Masroor Ahsan stressed over mobilizing international support in funding the projects for Afghan refugees and proper utilization of funds. The Committee directed for a detailed report on the RAAST project.
