IT minister calls for reduced taxes on telecom sector

The telecom industry, including Federal Minister for IT and Telecommunication, Syed Aminul Haque and the regulator, on Wednesday, protested against the higher rates of taxation imposed on the telecom sector.

Addressing the launch ceremony of the “Smart Phone for All” initiative, held in collaboration with GSMA and KistPay, the federal minister said, “The State Bank of Pakistan (SBP) and Federal Board of Revenue (FBR) need to understand the issues being faced by the IT and telecom sector.”

Earlier, Haque had strongly criticised the finance ministry and FBR for not addressing the issue of higher taxes in the telecom sector, saying the move was impacting the growth of the IT sector.

Stakeholders of the industry lamented that Pakistan has among the highest taxes on mobile calls, internet and mobile sets in the world, while the return on investments (ROI) was among the lowest.

“Since I have become the IT minister, I have stood by the telecom industry,” he said, adding that, “Digital growth is not only essential to strengthen the economy but is one of the basic conditions required to modernise the system of governance in the country.”

Highlighting some of the achievements made in the IT & Telecom sector since he took over, he said, “The Universal Service Fund (USF) has launched 28 projects, worth Rs65 billion, compared to only four projects that were launched four years ago.”

Under the initiative, mobile phones valued between Rs10,000 to Rs100,000 can be procured at 3-to-12-month instalments with 20-30% down-payment, making it easier for the low-income segment to afford smartphones.

Lauding Kistpay for the launch, Haque said the scheme will help increase the usage of smartphones across the country. This will eventually encourage people to become entrepreneurs and set up e-commerce businesses. Explaining that one of the prerequisites of the initiative is to have a smartphone manufactured locally. “Currently, there are 29 such companies assembling mobile sets in Pakistan,” he said.

Having initiated local manufacturing of smartphones, the minister said the next phase is global exposure. “The aim of these schemes is to equip the people of the remote and underdeveloped areas of Pakistan with a connection to the world,” he said, adding that, “Tiktok is set to open its offices in Pakistan next week, a team from Facebook is also arriving next week for discussions, and talks with Google about commencing 15,000 scholarships for the youth are scheduled to be held next month.”

GSMA Asia Pacific Chief, Julian Gorman added that, “The prevalence of smartphones in Pakistan is far below that seen in the Asia-Pacific region. This has to become a key priority so that low and middle-income consumers can participate in the digital economy.”

“All stake holders including the mobile industry, financial institutions, policy makers and regulators need to adopt a collaborated approach to enhance the usage of smartphones.”

Published in The Express Tribune, November 24^th, 2022.

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