Rs1,492bn transacted through Mobile Banking in one year

ISLAMABAD: Pakistan has witnessed an amount of Rs. 1,492 billion which was transacted through Mobile Banking during 2015-16.

This is testimony of the fact that transaction through mobile money has potential to expand reach of banking services to 85 per cent unbanked population of Pakistan.

During October to December, 2015 the total volume of branchless banking was over Rs.486 billion while the number of branchless banking transactions surpassed Rs. 101.6 billion during same period.

The amalgamation of Information and Communication Technologies (ICTs) and banking services can help in moving towards a fully documented economy which is necessary to improve the tax collection circle and achievement of 18 per cent tax to GDP ratio as stated under the goals of the Pakistan Vision 2025.

As per data in Pakistan Telecommunication Authority (PTA)'s annual report, the telecom sector has contributed Rs. 157.8 billion during fiscal year 2015-16 to national kitty as compared to Rs. 126.3 billion registered during previous year.

The comparison of growth between telecom revenue and telecom contribution over last fiscal year showed that the government collections have actually increased by 25 per cent whereas telecom revenues witnessed only 1.47% have raise during 2015-16.

The unprecedented collection during 2013-14 was mainly due to extraordinary deposits as a result of 3G and 4G spectrum auction.

In reported period telecom sector continued to grow positively in terms of subscription, revenues and tele-density. Broadband penetration has increased to 18.3 per cent from just 2 per cent in year 2014.

The ICT solutions, being offered on mobile broadband, are making a big difference in every walk of life.

Hundreds of billions of rupees are being sent and received over the mobile money channels by people of Pakistan.

The innovative and cost-effective solutions are also being offered in e-commerce, online education, e-health, travel and governance sectors.

Due to such high demand for mobile broadband services, Telenor Pakistan acquired 4G spectrum for US $ 395 million during 2015-16. Furthermore, the government collections will also increase from other sectors of economy due to broadband and ICT proliferation.

It may be further added that one component of overall government collections i.e. GST was decreased but there could be a number of factors behind this decline.

For example, the Federal government and the Government of Punjab have exempted GST on internet/data services whereas the Government of Sindh is charging reduced rate on internet/data services.

Resultantly, the share of tax-exempted data revenue in total telecom revenues increased to 29 per cent in 2015-16 as compared to 19.3 per cent in 2013-14.

However, the trade-off between GST collection and internet/broadband development turned out to be a wise decision by the Federal, Punjab and Sindh governments.