Pakistan has signed an agreement with McKinsey and Company to help Pakistan with end-to-end digitisation of the tax authority, Finance Minister Muhammad Aurangzeb said on Sunday.

“They [McKinsey] will work on the design and they will work on the implementation side as well,” he said while speaking at a panel discussion on ‘Opening Doors with Fintech’ during the special meeting of the World Economic Forum (WEF) in Riyadh.

He was responding to a question related to Pakistan’s economy where cash was still dominant as around 40% of people still use it instead of digital.

“It is indeed a big challenge. We have Rs10 trillion cash in circulation in the country at the moment, if you compare it to our annual revenue budget, it’s about Rs9.4 trillion. So almost half of the economy is in that undocumented [informal sector] sector,” Aurangzeb said.

The finance minister, a former chief executive officer of the Habib Bank Limited, stressed the need for reimagining the economy as other countries have done to get on the digital solutions.

He mentioned the national identification which is being supported by the National Database and Registration Authority and real time payment system, RAAST.

“These are two important pillars through which we can actually start moving towards sort of documenting the economy through digital solutions.”

The finance minister also mentioned the macroeconomic issues, saying that the country entered this ongoing year on a much better note than the country was this time last year.

“All the metronomic variables are moving in the right direction but certainly we have to bring more macroeconomic stability and more permanence in it to go forward,” he added.

When asked about how to bring a huge amount of population to get digital services, Aurangzeb said that new mobile phone assemblers were coming in and producing not just features but they have smart features built in.

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“We need more of those. From the telecom industry, there is a real push now in terms of bringing in financial incentivisation as we go forward. Whether we can bring it in the upcoming budget, some of that I guess you will know in four to six weeks,” Aurangzeb said.

He went on to add that the digital journey has to be accelerated and stressed the people and process should not be forgotten when seeking fintech solutions.

He further called for catering to the client buying behaviour and “timely decision and timely execution.”