Recently, the federal government of Pakistan proposed an increase in taxes on the telecom sector in the mini-budget. However, it was met with severe criticism and resentment from various sectors of the country. Consequently, the government is contemplating reviewing the new tax measures. The telecom companies weren’t the only entities to show resentment, and even the Government’s Minister for IT and Telecom Syed Aminul Haq expressed backlash to the new tax measures.
According to a source from the IT ministry,
The IT minister told the prime minister that an increase in tax on the telecom sector will have a negative impact on growth and investment.
Telecom Companies showing grievances over the proposed taxes:
The telecom companies of the country including PTCL, Jazz, Telenor, Ufone, and Zong have issued a warning that the proposed increases in taxation if executed, will greatly subdue the role of the telecom industry in terms of GDP growth of the country. Furthermore, the telecom companies sent a joint letter to Finance Minister Shaukat Tarin and IT Minister Aminul Haq. In the letter, the telecom companies said that the smartphones connected via mobile broadband are certain undoubtedly the biggest drivers of digitization. Consequently, a significant increase in their prices will reduce the affordability of the general public and mitigate the usage of mobile internet.
While on the other hand, Jazz CEO Aamir Ibrahim in a tweet expressed his concerns over the new tax measures. He said,
It seems the country was not sound serious about the ‘Digital Pakistan initiative’ of Prime Minister Imran Khan, as total taxes on telecom have reached almost 35 percent with the addition of 19.5pc GST on mobile calls. While countries are subsidizing internet services to strengthen broadband access for citizens, especially students, I am disappointed with talks about raising withholding tax (WHT) on cellular services to 15pc in Pakistan,” Mr Ibrahim said in his tweet message.