Minister of State for IT Anusha Rehman has ensured the IT companies that the 14 percent advance income tax (AIT) imposed on internet will be removed soon. Moreover she also wants recommendations from the companies for elimination of 8 percent turnover tax on the IT services provider companies.
Anusha Rehman Ensures the Removal of 14% AIT Tax on Internet
A delegation of Pakistan Software Houses Association (PASHA) and Internet Service Providers Association of Pakistan (ISPAK) met with Anusha Rehman and discussed the taxation issues with her.
President of ISPAK, Wahaj-us-Siraj told:
The minister assured the delegation that the matter of 14 percent AIT on internet will be taken up with the ministry of finance and Federal Board of Revenue. She was of the opinion that the imposition of AIT would impact the progress of internet and knowledge economy in the country. She assured that the ministry of IT and telecom would take all efforts to withdraw the AIT on internet usage.
Currently internet users are paying 14 percent AIT by the federal government and 19 per cent excise duty to the provinces. This adds up close to Rs 350 per Rs 1,000 usage by the consumers.
The state minister for IT said that 8 percent turnover tax on IT services companies could not be removed as it was imposed on all of the services sector companies. She asked the IT companies to bring some solid suggestions for the removal of this turnover tax so the matter could be taken up with the Finance Ministry and FBR.
Broadband penetration in Pakistan stood at 6.1 percent at end December 2014 which was 1.7 percent at end December 2013. Similarly the total number of broadband users increased to 11.4 million in December 2014 which was 3.8 million in December 2013. The major reason for growth is the initiation of 3G and 4G operations of cellular companies in Pakistan.