Telecom Sector Shows Growth Despite Heavy Taxes

In Pakistan, Telecom business has uplifted biddable heavy taxes for the government, directing the economy to widen and offering big openings to financiers.

Due to debt of millions of cellular subscribers after BVS Re-verification process, great competition and flat levies were witnessed. Despite last year’s difficulties, July-March FY-16, profits of the telecom sector totaled at Rs 333.2 billion.

Telecom Sector Shows Growth Despite Heavy Taxes

Also Read: Telecom Sector Contributes Rs.745bln to National Exchequer: PTA

The Ministry of Finance and PTA proclaimed that during the past five years (i.e) FY-11 to FY-15, the telecom sector has subsidized Rs 744.6 billion to the national fund in the form of varied heavy taxes and duties. In the first three quarters, July-March of FY-16 – alone, the sector contributed Rs 105.9 billion.

PTA and the telecom industry are of the view that:

“Reduction in tax rates, as well as, rationalization of taxes on telecom sector can result into better sector growth. Consequently leading towards better collection for the government in the long run.”

The operators of Long Distance and International (LDI) services have been given big enticements by the government’s Telecom Policy. They were given the right to bring and offer any international traffic to and from Pakistan.

At the end of March 2016, the number of 3G and 4G LTE subscribers was 27.87 million. It hints that the subscribers have been added by more than one million a year.

The telecom sector has raised and exhibited not only its own growth but has facilitated the economy bolster by larger offshore and domestic financing. Taking its services and facilities to 74.4% of the population, offering jobs and elaborating exports of telecom services.

Dr Syed Ismail Shah, chairman of PTA said:

“Innovation and growth opportunities were opened up in the telecom sector after the launch of next generation mobile services. 3G and 4G LTE services, in FY-15 were introduced. These are now picking up, pace as the cellular mobile operators continue to invest in the modernisation and expansion of their network and services. Keeping the ICT development agenda on priority, PTA reinvigorated the discourse on the way forward for smart Pakistan. Expansion of broadband services and development of applications in Pakistan is now taking place. During the first three quarters of FY-16, the overall tele-density has increased. The subscriber base is consistently reviving in the cellular sector as due to blocking of SIMs during biometric re-verification last year.”

At present the Ministry of IT is affianced with international phone and phone equipment makers. They are being invited to set up their manufacturing and assembling firms in Pakistan. We anticipate these talks will turn out to be beneficial, a Ministry spokesperson revealed.

Also Read: FBR Advised to Grant Industrial Status to the Telecom Sector