Stakeholders criticise tax on internet usage

ICT3 chief says imposition will lower mobile broadband uptake.


Our Correspondent June 08, 2015
ICT3 chief says imposition will lower mobile broadband uptake.

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.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

COMMENTS (10)

Abdul Hafeez | 5 years ago | Reply Internet is mostly used by IT Companies and Freelancer people. This is the only industry in Pakistan which is rapidly increasing and bringing money in Pakistan by selling services. Millions of un-employed but skilled persons doing work as freelancer and helping our economy by bringing money from all over the world. This tax will disappoint and many people would stop working. This is an IDIOTIC approach of the Govt of Pakistan. Govt of Pakistan should facilitate IT industry and Freelancers to grow their work instead of increasing burden of taxes.
Ahmad Mirza | 5 years ago | Reply Change is always hard to come by. You need Evolution my friend; these apps are helping people and do tell me which Villages have you visited recently? People in Villages are active users. Anyway, try to do more research.
VIEW MORE COMMENTS
Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ