Telecom group seeks withholding tax reduction
The Pakistan Telecommunication Company Limited (PTCL) group has urged the newly established government to cut withholding tax (WHT) in the upcoming budget.
In a statement on Wednesday, PTCL Chief Financial Officer (CFO) Nadeem Khan stressed the need for continuation of the policy which the previous government embarked upon.
He recalled that the previous government had announced a reduction in WHT in two phases. Giving details, he said that the government slashed WHT from 12.5% to 10% in the previous budget, while committing to reducing it further to 8.5% in July 2022.
However, the government withdrew its decision midway and increased it again to 12.5% in January 2022.
It caused an impact of around Rs3 billion to Ufone alone “from Rs15 billion to Rs18 billion”, he underlined.
About tax refunds, he lamented that the Federal Board of Revenue (FBR), despite several rulings of courts, had not yet released the refunds.
Shedding light on the company’s financials, Khan highlighted that the group posted a revenue growth of 3.2% year-on-year at Rs35.1 billion in the first quarter of 2022.
“Growth in revenue is mainly driven by strong performance in the consumer segment led by fixed broadband, mobile data, business solutions and microfinance services, despite the challenges of increase in advance income tax and reduction in mobile termination rates (MTR),” he underlined.
The profitability, however, remained under pressure due to a significant hike in power tariffs, devaluation of Pakistani rupee against the US dollar, higher interest rates, and other factors like upfront costs associated with the acquisition of 4G spectrum and related network rollout.
The group posted a net loss of Rs1.6 billion during January-March 2022.
About PTCL, he mentioned that the company revenue grew 3.5% year-on-year to Rs19.6 billion during the first quarter of 2022, mainly driven by the growth in broadband and corporate revenue segments.
Published in The Express Tribune, April 14th, 2022.
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