Government Must Rationalize the Taxes of Telecom Sector: CMOs

The Cellular Mobile Operators (CMOs) have shown concern on the perpetual increase in the taxes of telecom sector that has already pushed out a lot of players from the market. The Government and the telecom sector were not on the same page when the matter came for discussion about the taxes in the recent budget for the fiscal year 2016-17.

Government Must Rationalize the Taxes of Telecom Sector: CMOs

For the current fiscal year, the FBR Chairman has suggested that it may also introduce forensic audits of cellular companies. The forensic audit would be for the verification of the claims of the telecom operators that they are paying more taxes in Pakistan than anywhere else in the region. Meanwhile, the mobile phone importers have also made an appeal to the President, Prime Minister, Finance Minister, and the FBR Chairman Nisar Muhammad khan to facilitate the industry by giving suitable relief on current duties and tax structure on the import of mobile phones in the budget.

During the last five years, mobile companies have been collecting regulatory duties and taxes for the government as revenue. The sector also contributed around Rs. 105.9 billion during the first three quarters of this fiscal year in terms of initial and annual license fees, initial and annual spectrum fees, Universal Service Fund (USF) and Research and Development (R&D) Fund contributions, Access Promotion Contribution (APC) for USF, Numbering Charges, license applications including General Sales Tax (GST)/Federal Excise Duty (FED), SIM Activation Tax, Advance/Withholding Tax (WHT), sales tax on mobile handsets, custom duties, and other taxes.

Pakistan Telecommunication Authority (PTA) the regulatory watchdog also believes that the rationalization of taxes on the telecom sector can surely result into better growth and will be able to provide better collections for government in the long run.

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