In order to boost digital transformation in Pakistan and to facilitate investors and protect their capital with tax incentives for ten years, the government has amended foreign exchange regulations for special technology zones.
These changed regulations aim to boost investment and promote digital transformation, and a billion-dollar fund was in the works for the same purpose, reported Arab News quoting Special Technology Zones Authority Chairman, Amer Hashmi, at the event “Connecting Pakistan: COVID-19 Lessons for Digital Policy” – organized by the policy think tank, Tabadlabb, in Islamabad.
He said, “We have gotten ten venture capital funds now finally ready to come to Pakistan,” adding that “The state may think about going fifty-fifty with them, and create the first billion-dollar fund.”
Hashmi said that the government does not have cash, but is making efforts to raise revenue and employment. He said that digital initiatives would be accelerated in the next two years as Prime Minister Imran Khan was supervising the digital transformation process.
CEO Jazz, Aamir Ibrahim, said, “This is the inherent disconnect between the three key stakeholders: the investors or operators, the governments, and the end-users, who want the best service for free.”
High taxes are one of the major obstacles to the rapid adoption of fintech and digital payments despite initiatives such as the government’s instant payment system, Raast, Tez Financial’s co-founder, Naureen Hayat, said. Adding, “Cash from a customer’s perspective is still cheaper than digital. This perception comes as a result of taxes and extra charges.”
However, the CEO Telenor, Irfan Wahab, believed that while global demand for digital access during the COVID-19 pandemic and solutions to overcome obstacles increased manifold worldwide, in Pakistan, the same could not be adequately captured due to suboptimal government support and lack of preparedness by the industry.
In many other countries, regulators expanded the spectrum during the pandemic to allow smoother access to high-speed mobile internet. However, in Pakistan, the government’s focus remained maximizing revenue from spectrum sales, he said.