LAHORE: Perhaps, one of the most shocking aspects of Friday’s budget announcement was the imposition of a 100% tax on the telecom sector. As news settled in, Information Communication and Technology (ICT3) President Sohaib Sheikh weighed in on the debate.
“The new taxes on internet and data usage will have an adverse effect on telecom operators, which are working on the roll-out plans of all third and fourth generation networks,” said Sheikh who is the chief of the think tank comprising members from the telecom industry.
Addressing a press conference, jointly organised by stakeholders including ICT3, telecom companies and other stakeholders, Sheikh further said that all Cellular Mobile Operators (CMOs) are heavily investing despite an increase in import duties on telecom equipment.
“This tax by the Punjab government on internet is going to hamper the current 3G/4G uptake that has reached 15 million subscriptions in just one year of 3G/4G launch,” Sheikh added.
The Punjab government, through a notification, imposed 19.5% GST on usage of internet services on broadband, or cellular data providers to every consumers excluding educational purposes.
According to the notification issued by the Punjab government, this tax is imposed on all kinds of internet services in Punjab including 3G, 4G, DSL, EVDO, fibre.
Digital stakeholders have decided to black out their websites against the imposition of taxes.
“One year ago, the telecom industry of Pakistan had bought 3G/4G licences worth $1.2 billion, additionally paying 10% withholding tax on it,” Sheikh said..
Punjab is likely to collect around Rs3 billion in taxes from the sector this year; however, a corresponding negative growth on internet uptake will cause the national economy an estimated loss of Rs200 billion in five years.
Published in The Express Tribune, June 9th, 2015.
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