ISLAMABAD: The Ministry of Information Technology and Telecommunication officially announced on Tuesday that PayPal is not coming to the country on account of the Financial Action Task Force (FATF) objection, fearing terror financing, as well as, the international gateway is already serving major chunk of the Pakistani clients having accounts in the UAE and other countries.
“The remaining customers in Pakistan are not making business case for PayPal,” said senior officials of the ministry, while briefing the Senate Standing Committee on Information Technology and Telecommunication, here on Tuesday.
The parliamentary panel which met with Kauda Babar raised serious reservations over the problems faced by young Pakistani online freelancers, with particular reference to the processing of financial transactions/ foreign remittances.
The ministry officials briefed the committee about Pakistani online freelancers and the issues faced by them. The committee meeting also reviewed in detail the steps taken by the ministry for the processing of financial transactions/ remittances of online freelancers in particular.
The committee was also informed that the Ministry of Commerce is finalising an incentives package for new startups, as well as, other global gateway other than PayPal to facilitate and attract to the country.
Member IT informed the committee that freelancers have issues with the State Bank of Pakistan (SBP) and the Federal Board of Revenue (FBR).
Freelancers are currently unregistered and undocumented. They do not want be registered fearing harassment from government’s institutions. “Freelancers are ready to pay tax but do not want to be harassed by some government’s institutions,” IT Ministry official added.
Committee member Afnanullah Khan said that there is a risk of money laundering from freelancing without registration.
The committee expressed reservations that instead of facilitation, barriers are created for the freelancers.
The committee asked about the possibility of PayPal coming to Pakistan, to which IT Ministry officials informed that PayPal has refuse to offer its services in Pakistan. PayPal plans not to include Pakistan for next two years as FATF objects to its payments.
Afnanullah said that government should use the FinTech forum for freelancing payments from abroad.
IT Member said that the ministry plans to introduce system for freelancers like Roshan digital account. Prime Minister Office has issued directives in this regard. The payment platforms like Roshan Digital Account will be able to transact up to $2500.
Babar told the committee members that freelancers in Pakistan are generating Crores of rupees in the country without any government support. He further said that lower and middle class youth are associated with this sector. These young people can be the best source of valuable resources for the country with government support and encouragement.
The ministry officials said that they are in constant touch with freelancers and other stakeholders and efforts are being made to solve the problems of youth. Procedures for local payment systems and international financial transactions are being worked out with SBP to improve the process of financial transactions and remittances. They further said that the process of registration of freelancers has been started but due to lack of trust, the lancers have so far distanced themselves from the process of registration. “We are trying to include these young people in the regular database through an awareness campaign informing them about the benefits of registration.”
The chairman of the committee said that these young people are our future and they should be given all possible help. The Ministry of Information Technology informed the committee members that various training programs have been started in collaboration with the universities across the country to enhance the potential of the youth so that their capacity is further enhanced by preparing the graduates as per the requirements of the market. If freelancers are registered, they will be able to enjoy tax exemptions and other additional benefits.
Member IT said till March 2020, there was a tax exemption on the IT sector. However, as IMF conditions, tax exemption was abolished. The Ministry of Commerce will prepare a complete package and brief the Ministry of Finance next week. It is hoped that the Ministry of Finance will approval a package for international gateway.
The committee meeting was attended by Leader of the House, senator Dr Shahzad Waseem, senators Sana Jamali, Shahadat Awan, Zeeshan Khanzada, Afnanullah Khan, Palwasha Mohammad Zai Khan, Seemee Ezdi, Naseema Ehsan, Rubina Khalid, secretary Ministry of Information Technology and Telecommunication, chairman PTA, and officials from the NITB.
Copyright Business Recorder, 2022