Pakistan: 75000 individuals received Rs. 60bn through digital transactions

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Pakistan: 75000 individuals received Rs. 60bn through digital transactions

Monitoring Desk: 

In less than two-and-half years, over 75,000 individuals received Rs. 60bn through digital transactions from various foreign countries. This appeared to be a new dimension in taxation across Pakistan.

Digital transactions have sent alarm bells in the power corridors concerned about poor taxation in the country. The individuals earned this huge amount through freelancing and selling goods abroad through digital means, sources in the Federal Board of Revenue (FBR) revealed on Wednesday.

The documents revealed foreign clients paid money to Pakis­tani individuals through a US-based company, M/s Payoneer Inc., engaged in cross-border payments in 200 countries and supporting more than 150 currencies, including the Pakistani rupee. The money was finally transferred to their Pakistani bank accounts. The digital transactions were carried out in tax years 2019, 2020 and half of the tax year 2021.

The investigation reveals that a huge amount of Rs60.308bn was disbursed to 75,615 beneficiaries as their foreign-source income in terms of provisions of Section 101, read with Section 11(5), of the Income Tax Ordinance 2001.

As technology develops, scores of people continue to adopt digital means and technology for transactions and marketing in Pakistan like in other parts of the globe. Thousands of youth have launched web designing, article writing, app development, SEO, and data entries to earn money.

The FBR remained clueless about such mega transactions from abroad to thousands of youth across Pakistan for the last few years.

The overall revenue imp­act of the unearthed digital transactions is estimated to be over Rs10bn. This will not only result in broadening the tax base but also improve the overall tax-to-GDP ratio of the country by adding genuine taxpayers having regular foreign income.

Out of this, 45,012 beneficiaries do not exist on tax roll — have no National Tax Number (NTM) — and 30,603 are registered on tax roll. However, only 17,985 of the registered persons are return filers, while 12,618 have not filed any returns with the tax department.

Further details show that Payoneer Inc. has no physical presence in Pakistan. Foreign clients make payments in the Payoneer account of the individual Pakistani in the United States and the person withdraws the money from Payoneer account maintained by Mobilink Micro Finance Bank Limited (MMBL) either through Jazz Wallet or from their account maintained with any bank in Pakistan.

Pakistan: 75000 individuals received Rs. 60bn through digital transactions

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