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DPA
Islamabad
Pakistani authorities said on Tuesday they were optimistic a new digital payment system will boost one of the lowest tax collections in the world by beginning to document an overwhelmingly cash-driven economy.
Pakistan’s tax-to-GDP ratio is less than 10 per cent, which has in the past forced the country to seek loans from global lenders and look for occasional handouts from partners like China and Saudi Arabia.
Around 40 per cent of the country’s total transactions take place in cash, a ratio much higher than single digit figure in the developed world.
The government this week rolled out a new digital system for instant payments, Raast, which means “right path” in Urdu.
The system, which has been developed in cooperation with the Bill and Melinda Gates Foundation, the World Bank, United Nations and Britain, is “very quick and low cost,” said Abid Qamar, spokesman for the country’s central bank.
A couple of digital payment and cash transfer systems already exist in Pakistan that do not require bank accounts for transactions, but Raast is the first one run by the government, Qamar said.
“We plan to switch disbursement of government employees’ salaries and pensions through this in future,” the spokesman said of the government’s long-term goals.
If adopted successfully, the new system could help the country boost revenue collection by helping authorities document what is often referred as the black economy, officials and experts said.
“We hope a turnout in our tax and other revenue collection as a long-term benefit,” Qamar said.
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13/01/2021
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