Digital ministry: Business community proposes digitized ministerial service

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Importers and assemblers of computers have proposed Finance Minister Asad Umar to set up a digital ministry.

Computer sellers/shippers and assemblers have proposed Finance Minister Asad Umar to set up a digital ministry to solely manage the rapid advancements occurring in the Information Technology world.

Senior VC Pakistan Computer Association (PCA), Yousaf Jamal, has made a presentation to the minister on the future of IT industry and recommended ways for improving the functioning of the Federal Board of Revenue (FBR).


According to Yousaf Jamal, in view of the rapid developments taking place in the computing world, the government of Pakistan should set up a new digital ministry, not only to connect industries/universities/hospitals and many other segments within Pakistan but also enable the citizens to enhance their outreach and access to global markets.

“If we put the right people on the right job then it will create an atmosphere of competitiveness amongst ourselves to forge ahead to put targets together to take our IT industry to higher levels than it currently stands at,” he said.

The first and the foremost task should be to convert the entire country’s cable system to fibre cables. This is important to get the flow of information at a quality speed, without much hindrance and at the same time providing upgrade to the computer systems currently in use.

This would certainly require a financial and quality human assistance. However, it would be a worthwhile investment, which would pay gradually but surely in years to come. This should also include incentives and interest-free loans for the startups to join this specialized field not only to improve their own income but also to create opportunities for bringing in the foreign exchange to the country.

Discussing FBR, Yousaf Jamal alleged that prime hurdle is the kind of harassment and corruption, which exists in the Board from top to bottom. He said total overhaul is required and the new government needs to engage with all the stakeholders to come forward and submit serious and workable proposals.

“We need to look into the entire tax system of various taxes being charged at number of levels, duplicating the same taxes again and again,” he suggested, noting that the language use in formulating the SROs and the difficulty in understanding and interpreting them is an uphill task for an ordinary business person to follow.

“Various tax regimes, in which exemptions are available but businessmen are deprived of them for no reason given and kind of non-serious and non-helpful attitude, makes you feel so low when it comes down to dealing with FBR officials on matters relating to taxes,” he said.

He said that simplification of the tax system is a buzzword in all business communities across Pakistan and one must admit that the FPCCI and the active chambers across Pakistan have not been able to put any decent proposal together to address critical issues.

Yousaf Jamal stated that large corporate companies have the ability to manoeuvre due to their size and the capital available to them from various sources, including financial institutions. He said the financial institutions feel somewhat comfortable with them due to their size and the kind of assets available to draw comfort from.

The problem lies with SME sector, which due to their sheer size, is not in a position to take any financial assistance and often with great track records not being able to borrow money for any expansion in their business. The money is only available to this sector against a mortgage of assets or back-to-back collateral in liquid or fixed form.

There is a dire need to mechanize a system, whereby the availability of funds should be ensured for them at a decent cost and in this respect the central bank has a role to play. In most developing countries SME sector is a backbone of their economy and they are being facilitated by both governments and the banks.

By any chance if they have to mortgage any of the assets then the system to put the proposal together is so difficult and cumbersome that discourages clients to avoid this route. The local revenue departments are not at all helpful and in fact create so many hurdles that it become almost impossible to get any legal paperwork done without paying hefty bribe. This whole system at revenue departments (tehsildar and patwaris) needs to be revisited and requires radical changes for the betterment to obtain required information without much difficulty, he said.

The recent restriction to charge 100 percent cash margin on letter of credit (LC) to import goods from abroad has created severe cash flow problems for SME sector. Though it has discouraged several importers to avoid importing non-essential goods, yet at the same time, banks are enjoying free money, which now sits with them in billions without any cost to them and in turn lend at hefty interest rates to their customers. The central bank should take notice of this and in some way should compensate the importers for the cost of money being added to their cost of doing business.

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