Online payment of taxes, duties spikes
Online banking, ATMs, virtual banking and mobile payment systems are some of the key banking services making full use of information and communication technologies. PHOTO: FILE
Businesses and people are rapidly adopting digital channels to pay taxes and duties as the government has collected revenue worth Rs4.31 trillion through online banking since the introduction of the facility in March 2018.
The collection of taxes and fees through alternative delivery channels (ADCs) including internet banking, mobile banking, ATM machines and over the counter (OTC) at bank branches “has gained traction, amid trust of the taxpayers”, State Bank of Pakistan (SBP) reported the other day.
The government has collected an aggregate amount of Rs3.8 trillion since July 2020 compared to Rs510 billion in the first 28 months (March 2018 to June 2020) after the launch of the system, according to the SBP Annual Performance Review 2021.
“This points to the robustness of the new system, especially over the past year.”
The Federal Board of Revenue (FBR) and the government of Punjab initially adopted the system in 2018. Keeping in view the success of payments through the ADCs, the Islamabad Capital Territory (ICT) administration, Khyber-Pakhtunkhwa, Sindh and Balochistan also implemented the ADC mechanism for their taxpayers in FY21, the central bank reported.
Furthermore, to promote digital payment of government taxes and duties, the SBP eliminated the transaction fee for taxpayers using digital modes with effect from January 1, 2020, it said.
Businesses and people are paying taxes through the alternative delivery channels including 15,000 ATMs all over the country, over-the-counter (OTC) facility available at 16,000 branches of commercial banks and millions of internet and mobile banking accounts.
Online tax refunds
Similarly, the government has refunded taxes worth Rs25.2 billion to exporters through approximately 297,000 transactions since the introduction of the e-payment refund system on September 30, 2021.
The SBP, in collaboration with the FBR, developed and implemented an e-payment system for end-to-end digitisation of duty drawback and income tax refunds to businesses.
After digitisation of these processes, the refunds are directly credited to the beneficiaries’ (taxpayers) accounts through straight processing (electronic transfers).
“This reduces the human involvement on part of the Pakistan Customs/ FBR to absolute minimum and significantly decreases the turnaround time for the payment of refunds,” the central bank said.
The refunds provide the necessary liquidity and working capital to businesses to contribute positively to the country’s foreign exchange earnings. Thus, the payment of tax refunds to taxpayers is playing an important role in helping the businesses manage their cash flows, with positive spillover on the country’s export performance and thereby putting the current account on a stable trajectory, it said.
Future of online banking
SBP has completed major work on the deployment of the second use case of Raast ie to enable person-to-person transfers. “Successful deployment of this stage would allow consumers to make instant transfer to their family, friends and acquaintance.”
High ranking officials from the central bank stated that SBP was close to launching the second phase of the indigenously designed instant payment system Raast. It might do so in weeks or a couple of months.
Besides, the central bank is also working to develop a standardised approach with respect to QR payments in order to implement an interoperable payments regime in Pakistan.
It remains engaged with banks and other financial institutions to enable customers and financial institutions to accept and process QR payments in a seamless manner.
Published in The Express Tribune, November 2nd, 2021.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.