OPINION
Hamza Nizam Kazi
Do we need a Google financial office in Pakistan?
D
uring a meeting of the National Assembly Standing Committee on Finance and Revenue, an FBR representative stated that it had warned digital platforms that it will not allow Google, Facebook, and YouTube to operate in Pakistan without payment of taxes. Though no official statement or clarification was provided, there hangs a sword over the head of these digital platforms including online e-commerce companies that there may be a huge demand notice coming their way or they may get a reprimand by the administration in Pakistan to abide by the law of land. Looking back in 2012 Google’s then head of Emerging Market Development, Southeast Asia, Jana Levene told a gathering that Pakistan is the next big market in the region. Even then it was highlighted that the laws regarding internet censorship, and the security of Google employees are the things they take into account. Accepting the fact that Pakistan was a $400 to $500 million market back then in 2012, the estimates reflect the fact that now
Hamza Nizam Kazi is a corporate and technology lawyer having experience in the telecom industry and advising digital startups. He can be reached on hamza.n.kazi@gmail.com for advice on legal and regulatory issues pertaining to the telecom sector and electronic media. COMMENT
The above scenario explains a need for a regulatory framework and policies catering to all stakeholders, the creators, the content platform, and the authorities, whether telecom, information technology or tax, under which these platforms are to be governed.
Pakistan’s overall internet penetration stands at 45% with 99 million mobile users and 46% with broadband subscribers with access to Google, Facebook, YouTube, and e-commerce websites. Last year, The Citizens Protection (Against Online Harm) Rules 2020 were notified. The Rules, formulated under the Prevention of Electronic Crimes Act (PECA) 2016 and the Pakistan Telecommunication (Re-Organization) Act, 1996, gave broad powers to the National Coordinator over social media content. This made the big tech giants rethink their strategy to enter into Pakistani market In August last year, Amazon announced that it was considering registering a local office in Pakistan to drive the adoption of cloud computing. A couple of months back, the Federal Minister for Information Technology confirmed that social media companies are ready to open offices in Pakistan while giving an interview to a private news channel. These vacillating and unclear decisions and policies at the highest levels create doubts among these companies. Besides, the tax collection authorities weighing in and ready to pounce on any such opportunity for revenue collection through taxation, creates further impediments in these organizations setting up their businesses. Who doesn’t want to be recognized as a country having the local offices of these tech giants here, creating an impact and promoting the soft image of the country? Their offices here would increase employment and investment opportunities but what really matters is whether we have suitable conditions, regulatory framework, a tax-friendly environment, and internet penetration to allow these companies to have their offices? Google is located in 154 locations in the world while YouTube has eight office locations across six countries only and catering to the entire world population remotely. Bearing in mind that Pakistan will soon have the fifth largest population in the world, with conditions of doing business getting friendlier, internet penetration and use of smart-
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