Telecom remains biggest source of revenue for Punjab

Tax suspension can upset target, says PRA


Shahram Haq July 08, 2018
Sales tax on telecommunication services is the top revenue generator for every provincial revenue authority. PHOTO:REUTERS

LAHORE: The Punjab Revenue Authority (PRA) has managed to surpass revenue generation of Rs100 billion in fiscal year 2017-18 for the first time since its inception back in 2011, but fell short of the revised estimate by Rs7 billion.

The authority taxed 61 services in the province, generating a total of Rs108 billion against its revised estimate of Rs115 billion for the last fiscal year. The biggest revenue generator, over the course of eight years, remains the telecommunication sector which earned Rs131.15 billion out of total Rs395 billion.

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PRA Chairman Dr Raheel Siddiqui said that no doubt sales tax collections on telecommunication services are the biggest respite. “All provincial authorities are meeting with the Federal Board of Revenue (FBR) to sort out the issue of suspension of taxes on telecommunication services,” Siddiqui told The Express Tribune recently. “It could upset our targets in the future.”

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Sales tax on telecommunication services is the top revenue generator for every provincial revenue authority.

The other major services generating revenue for the PRA are withholding agents that brought Rs54 billion, banking and non-banking insurance helped earn Rs46.20 billion and restaurants and hotels collected Rs18.5 billion in eight years.

Though the PRA is trying to speed up its efforts to tax the untaxed, difficulties remain. For instance, it is a challenge to tax certain restaurants, community, sports clubs and resorts.

“There are 14 large- and medium-sized clubs in Lahore and its vicinity alone and we are getting only around Rs20 million a month from them,” PRA Assistant Commissioner Altaf Hussain told The Express Tribune.

“Similarly, we are getting only Rs200 million a month by taxing 1,000 restaurants in Lahore, though our survey identifies around 2,000 restaurants which can be taxed.

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“We are working to bring others under the tax net but many have managed to get a stay order. Those who don’t want to give taxes have a hundred excuses, many restaurant owners say that sales tax on services cannot be applied to them as they are just selling the goods,” he said, adding that same is the case with the community clubs.

 

Published in The Express Tribune, July 8th, 2018.

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