Reforms needed to boost e-commerce in Pakistan

World Bank official says low internet penetration in Pakistan hindering growth

ISLAMABAD:

Pakistan has one of the lowest internet penetrations, which is hindering it from making gains in the e-commerce sector, said World Bank Senior Economist Gonzalo Valera, adding that the World Bank was keen to help the commerce ministry with e-commerce reforms.

Valera shared these views during an online dialogue on ‘E-commerce – the scope and facilitation’ organised by the Sustainable Development Policy Institute (SDPI) on Wednesday.

Participants of the seminar were of the view that e-commerce offers huge scope and potential for Pakistani markets, however, the right policy reforms and facilitations by the government could play a key role in tapping the real potential of this crucial component of business and trade.

Speaking on the occasion, USAID Chief of Party Hussan Bano Burki said that timely implementation of e-commerce policy could enable Pakistani market to benefit from opportunities in the digital space that is available to local and foreign firms.

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

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

He added that people still have confidence and trust issues in making online payments and the complex tax regime is a barrier to growth of the sector and new firms to venture in it.

“Currently, all provinces have a different GST regime, which is giving rise to multiple layers of taxation and thus, hurt the tax payer.”

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

Meanwhile, Ministry of Commerce Joint Secretary Aisha Moriani informed the participants that the e-commerce policy had been approved by the cabinet and the ministry was working with the industry stakeholders for timely implementation of the new policy.

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

HUB Leather MD Asfandyar Farrukhi was of view that changes in tax code take place very frequently. Therefore, he said, “We need to make digital payments cheaper.”

TIE Pakistan CEO Zeeshan Shahid said that there was a need to incentivise formal and informal retailers to come online.

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

Published in The Express Tribune, July 2^nd, 2020.

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