Recently, Punjab government withdrew the imposed tax of 19.5% and became the first province that took the decision to withdraw the tax. This issue of 19.5% provincial sales tax on mobile internet and data services was also raised by PTA as well.
In a similar way digital publishers nationwide have also demanded Khyber Pakhtunkhwa Government to eliminate tax on internet and data services of mobile phone companies to give reprieve to common people of the province. Prominent digital publishers, in a press conference admonished Chief Minister of KPK to withdraw tax which is directly associated to the development of the provinces.
Digital Publishers Demanded KPK Govt to Withdraw 19.5% Internet Tax
Approximately, KPK encompasses 10.5% of Pakistan’s economy having 12% internet users of Pakistan’s total internet users with prospective to develop significantly with increasing availability of 3G/4G services in various cities.
KPK levied 19.5% taxes on all kinds of Internet (DSL, EVO, 3G, 4G, WiMAX) in 2014. Digital Publishers informed that the paybacks of increased broadband usage with tax-free internet will also mean viable and smooth e-health, e-education, e-farming and other similar internet and smartphone based projects. Broadband internet penetration will not only impact positively on academic projects of the KPK government but it will also help curl the high-tech startup network including young polished thinkers from the province, they further added.
A combined industry letter had been written by the CMOs and PTCL to CM Khyber Pakhtunkhwa earlier in June 2015 demanding the provincial government to remove General Sales Tax (GST) on internet and data services.
Cellular mobile operators in their joint statement said,
“Taxation on Telecom Sector in Pakistan is currently already one of the highest in the world. We believe that imposing additional taxes in the form of GST on data services will not only hamper economic growth in the country but will also adversely impact internet penetration. We strongly believe that it will slow down the growth of 3G and 4G in the country.”
CMOs also added that cellular operators have capitalized $10 billion during the last decade and have strategies of further augmenting their investments up to $4 billion in next three to four years. But this will be possible only if the taxes are withdrawn. In Pakistan tax rate on telecom services is 40% which is one of the highest operative tax rates in the world.
We hope that KPK Government will look into this issue and try to withdraw the 19.5% internet tax which is a hurdle in the penetration of broadband services. If the taxes are not removed it will affect the business of telecom operators at a time when the government is progressing towards the auction of the remaining 3G/4G spectrum.