By Amin Ahmed
ISLAMABAD: The Asian Development Bank (ADB) has urged Pakistan to implement a uniform 5 per cent general sales tax (GST) on all digital transactions 鈥 with an input tax credit for five years 鈥 to accelerate digital payments, promote e-commerce, and reduce cash-based inefficiencies in the economy.
In its report Pakistan鈥檚 Digital Ecosystem: A Diagnostic Report, the ADB also recommends cutting corporate income tax and the cost of doing business for small and medium enterprises (SMEs) by 10pc for the next 10 years, conditional on digital registration and transactions.
To attract global ICT investment, the report suggests simplifying taxation and foreign exchange regimes for ICT exporters. It proposes capping payroll taxation at 15pc of income for ICT-exporting firms and offering tax credits for hiring local talent.
A 鈥淒ata Exchange Layer鈥 and full adoption of the 鈥淧akistan Digital Stack鈥 are recommended to digitise governance and regulation. The report recommends establishing a dedicated technology fina