Impact of Data Warehousing and Business Analytics on Pakistan’s Economy
Pakistani economy is in need of lifesaving steps to get going with the almost empty treasury of Pakistan taken over by new government .
The pressure of FATF, corruption and money laundering, minimum tax payers and inept exports everything contributing.
The immediate challenge is revenue enhancing to ease the pressure on government treasury to meet the expenses for the new government.
PM Khan started off with austerity drive, cutting off discretionary fund of PM and MNAs. According to government official it is about PKR80 billion.
Not bad to start with, plus monthly expenditure of Prime Minister House which is approximately 2 billion rupees per year.
Furthermore, the governor houses and other royal places type buildings are being decided to utilize in other revenue generation purposes to avoid extra burden on national exchequer.
It all sounds great for a new government in its initial 20 odd days start.
However, the government has huge ask to address the corruption, money laundering, expanding tax payers net these issues cannot be controlled on the existing out of date systems in place.
The government has to implement latest technology to counter these issues. The developed and developing countries are implementing Business Intelligence, data warehousing, ETL to keep track of necessary data in real time and with complete audit trail.
This also minimizes the human involvement, their judgmental errors and possibility of manipulation.
The NADRA data is in place and achieved a satisfactory level of reliability. NADRA data should be utilized in centralized data connectivity with State Bank of Pakistan, Foreign Exchange Companies trading record, Banks data, sale/purchase transfer of properties data etc.
It is noteworthy that NADRA, SBP, FBR, SECP data is already available in database.
Initially these departments should integrate their data to start with. These departments are backbone of revenue generation.
Now the process of creating Data Warehouse (DW) should be initiated. Once the DW is integrated ETL will be done.
The key will be Computerized National Identity Cards (CNIC) of individuals. In case of companies their registration numbers from SECP.
The business intelligence and business analytics will compensate efforts to identify the individuals out of tax net based on banking data and FBR data linked with their CNIC.
The best part of this solution, it will not require any legislation (to the best of my knowledge).
The astonishing fact is we have 50 million accounts (Page 26) as per SBP against the total population of 200 million of Pakistan. Out of these 50 million accounts only 1.2 million people are registered tax payers.
That shows out of 200 million the 25% have bank accounts (in 2017) and 2.4% of 25% people are contributing to national exchequer. To bring the remaining affording class in tax ambit the Government needs to refer Financial Emergency in Pakistan. Which can be dealt in second stage or simultaneous planning can be started.
The first priority of the Government should be to bring the remaining 22.6% of bank account holder in tax ambit. The financial year 2017-18 accounts for total direct tax collection Rs.1.536 Trillion. This is only 2.4% of 25% bank account holders, if for the sake of discussion this amount is grossed up to full 25% this figure will be Rs.36.864 Trillion, contributing 24 times more than what is accumulated at this point of time.
The direct taxes will also have trickle down impact on sales tax and other taxes. Currently sales tax contribution to Government treasury is Rs. 1.491 Trillion. The Government should also start General Sales Tax (GST) awareness campaign for general public to collect the GST receipt whatever purchase they make so the manufacturers/wholesalers & retailers not contributing or evading GST can be brought in the GST net.
The public should be made conscious of the fact if they ask for GST invoice from the seller will have to register in GST regime to provide the said invoice. This will result in registration in GST, where the benefit of registered seller the reduce rate of GST will be applied and result in reduction of purchase price.
The impact of consumer getting GST invoice from the seller will be colossal because of the buyer totaling to 200 million, out of 200 million will not come into tax payer class but they still be buyer.
This data with the help of analytical tools the relevant Government departments should be able to see the trends, analysis, summaries of the data on their dashboards.
Technology implementation does not require long terms neither their results will take time to show the results expected.
The main concern will be choosing the right technology consultants, implementation teams. The timelines should be realistic and monitored with project management application to keep the projects within desired cost and timeline.
Very high levels of transparency can be achieved with new systems based on latest technology will enhance the public and international community trust level.