KARACHI: State Bank of Pakistan (SBP) has stressed the need to resolve tax conflicts to enhance financial services in the country.
In its annual report for fiscal year 2015/2016, the SBP said that the government policy of broadening the tax base had bearings on financial inclusion.
“Specifically, the imposition of the transaction tax on the withdrawal of more than Rs 50,000 per day from bank accounts is also applicable on branchless banking agents, who use their bank accounts to facilitate customers’ transactions,” the central bank said and added that these agents now have incentive either to refuse customers once they reach the threshold of Rs 50,000 per day, or pass on this additional tax to their consumers.
“Early resolution of such conflicts is needed to promote financial services in the country,” the SBP said.
The central bank said that rationalization of tax structure is imperative as its high incidence both on operators and consumers, acts as one of the major barriers to affordability and penetration of the mobile services.
The SBP also emphasized that telecom companies should enhance networks and work closely with banks to introduce more customer oriented services beyond remittances, such as insurance, savings, credit, etc.
In its report the SBP said that telecom sector recorded a sharp improvement, mainly due to recovery in the operations of cellular companies. It may be noted that the SIM verification campaign launched in 2014/2015 posed a major challenge to the telecom industry. Besides reducing the number of subscribers and increasing cost to mobile operators, this campaign also overshadowed the rollout of newly introduced 3G/4G services.
