Telcos denounce ‘regressive’ budget

Telecom companies have raised serious concerns over the proposed budget measures, denouncing them as sudden and regressive, with the potential to cripple the very foundation of the digital economy.

The dream of a “Digital Pakistan” faces a nightmare as the telecom industry vehemently contests the proposed measures in the Finance Bill 2024-25. These measures, categorised as abrupt and regressive, could potentially trigger a cascade effect impacting Pakistan’s overall economic well-being.

The telecom sector serves as the backbone for e-commerce, freelance work, financial services, and crucial citizen services. Stifling its growth through impractical tax burdens on non-filers, unfair penalties for matters beyond their control, and hindering access to affordable mobile devices for low-income groups could have disastrous consequences.

In a strongly worded letter addressed to the Minister of Information Technology & Telecommunications, Shaza Fatima Khawaja, the telecom industry highlighted several critical issues within the proposed bill. The 75% advance tax collection on mobile services for non-filers is deemed impractical due to existing infrastructure limitations. Additionally, penalising telecom operators for non-compliance with the Income Tax General Orders – a responsibility outside their purview – is seen as blatantly unfair.

Perhaps the most concerning measure is the increase in sales tax on mobile handsets below $500. This directly targets low-income groups, hindering their access to affordable devices and further widening the digital divide. Affordable mobile phones are the gateways to digital inclusion, and this tax hike serves as a major barrier to progress towards a truly “Digital Pakistan.”