No tax on internet data usage, clarifies energy minister

Federal Minister for Energy Hammad Azhar on Friday said that Prime Minister Imran Khan and the federal cabinet did not approve the Federal Excise Duty (FED) levy on internet data usage and it will not be included in the final draft of the budget.

The clarification came soon after the PTI government faced heavy criticism on social as well as mainstream media for imposing tax on internet data.

"The PM and Cabinet did not approve the FED levy on internet data usage. It will not be included in the final draft of the Finance Bill (budget) that is placed before parliament for approval," the energy minister wrote on his Twitter handle.

Earlier, PM Imran-led government unveiled Rs8.4 trillion federal budget for the fiscal year 2021-22, with a major focus on pursuing all-inclusive, sustained and robust economic growth through comprehensive planning and development.

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Unveiling the budget, Finance Minister Shaukat Tarin that the current account deficit was at a historic high of $20 billion but the government through its prudent policies managed to drag the economy out of trouble.

He said the country was now out of a dangerous situation as the government took initiatives for its economic sustainability as evident from 3.94 per cent Gross Domestic Product (GDP) growth rate during the current fiscal year.

Highlighting the success of the incumbent government, the minister said they had managed to bring the current account from deficit to a surplus of $800 million. He said that the economy is on the road to stabilisation and growth.

For the telecom sector, federal excise duty has been reduced from 17% to 16%, he said, adding that the withholding tax will be reduced by 40%.

The finance minister further added that the WHT on mobile phone services has been reduced from 12% to 10%.

The government plans to further reduce taxes on mobile phone services to 8%.