GoP Receives Rs 124 Billion Tax from Telecom Sector During FY2015-16

During the Fiscal Year 2015-16 (FY16), GoP received Rs 124 billion tax from telecom sector. Telecom subscribers paid Rs 123.47 billion to the government in terms of taxes and duties on telecom amenities. Pushing entire telecom sector contribution to national exchequer up by 25% to Rs 157.85 billion.

Besides this the government has collected Rs 41.65 billion GST and Rs 81.82 billion in terms of custom duties, Withholding Tax and other taxes from the public for using telecom services in FY16.

GoP Receives Rs 124 Billion Tax from Telecom Sector During FY2015-16

According to the PTA yearly report for FY16, telecom sector has subsidized an amount of Rs 157.85 billion to national exchequer in terms of regulatory duties and taxes during FY16. Recording 25% yearly growth over contribution of Rs 126.3 billion in FY15.

Telecom companies remunerated Rs 34.1 billion to PTA in terms of first and annual license fees, annual radio frequency, spectrum fee, annual spectrum administrative fee, USF and R&D fund contributions, APC for USF and numbering charges, etc.

In the meantime, telecom companies’ profits remained still in FY16 as total telecom sector revenue recorded only 1 percent progress. Posting Rs 452.9 billion revenues in the said year as compared to Rs 446.3 billion in FY15. Though cellular mobile operators during the fiscal year under review took some Rs 348.9 billion as revenue. Representing 10% annual growth while it had held Rs 317.1 billion in 12 months during last fiscal year.

Also Read: Government Gets Rs 127 billion Tax from Telecom Sector in FY15

It looks like mobile operators have been overcoming the damages that occurred due to loss of millions of cellular subscribers after BVS, renewal process and strong rivalry that enforced them to lesser tariffs in preceding years.

“Cellular mobile operators are offering one of the lowest mobile call charges in the world. And the affordability of services has contributed to phenomenal growth in the mobile adoption. All operators are involved in aggressive marketing campaigns and promotions. Therefore, the cellular mobile segment of Pakistan needs a thorough review. So that financial viability and health of the segment can be assured.”

The report stated.

Investment in telecom sector also fell ominously in FY16. As total investment registered 29% decline to $ 719.7 million as against investment in telecom sector almost $1001 million in FY15.

According to the division, cellular mobile operators capitalized $659.4 million, LDI sector saw $6.3 million investment, and local loop operators invested $54 million whereas wireless local loop operators did not make any outlay.