Digital means uses for tax collection reach up to Rs 346 billion

The central bank announced the withdrawal of fees on online payment of taxes and duties for encouraging taxpayers to use digital means for tax payment with the collection via such channels having reached Rs 346 billion since earlier last year.

Digital means uses for tax collection reach up to Rs 346 billionThe State Bank of Pakistan (SBP) said it abolished the fee on payment of government taxes and duties through alternate delivery channels (ADCs) and over-the-counter (OTC) from January 1, 2020.

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Presently, the taxpayers pay Rs10 to Rs50 per transaction for payment of taxes through ADCs depending on the amount of tax paid, and Rs50 per transaction for the payments through OTC.

SBP said in a statement that “This fee will be borne by SBP instead of taxpayers from January 1, 2020. The change has been notified through SBP FD (finance department) circular no. 4 of 2019 dated December 27, 2019.”

The central bank further informed that the decision is part of SBP efforts to promote digital payments and is likely to attract larger number of taxpayers towards digital payment of government taxes and duties.

Commercial banks in Pakistan are expanding their infrastructure for supporting e-payments. As on quarter-end January-March, 2019, there are 15,549 bank branches reported by the banks/microfinance banks, out of which 114 are overseas branches. All branches, except 27, are providing online banking services to their customers. There are 14,575 automated teller machines (ATMs) and 55,240 point-of-sale machines in the country. Besides, banks are also providing internet, mobile and call center banking facilities to their customers.

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SBP in collaboration with the Federal Board of Revenue, introduced the mechanism for online collection of taxes and duties in March 2018 with the objective to facilitate taxpayers. The tax payers can pay their taxes from the convenience of their homes or offices using internet/mobile banking facilities, through 14,000 plus ATMs or any of the 15,000 plus branches of commercial banks across the country.

SBP told that so far Rs 346 billion has been collected through this mechanism. The collections through the ADCs/OTC modes are likely to grow exponentially as the awareness about the mechanism improves.

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SBP said it is also running an awareness campaign to familiarize the taxpayers, tax bar associations, chambers of commerce, clearing and forwarding agents and business community about the ADC and OTC payment mechanisms. Seminars and awareness sessions are being arranged across the country through the field offices of SBP Banking Services Corporation.

The first such seminar was held in Karachi on December 26, 2019, which was attended by corporate taxpayers, representatives from chamber of commerce, trade associations, commercial banks, tax bars and audit firms. The participants appreciated SBP efforts for promotion of digital payments and said such sessions are critically important for enhancing public awareness and allaying their fears and apprehensions about digital payments.

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