Government of Pakistan Needs to Reconsider its Taxation Policy

Henry Parker is an experienced public affairs, public policy and strategic communications professional with a nine year track record of meeting the needs of clients and stakeholders in both Government and Private Sector. In his career, he has successfully shaped policy decisions and made key interventions in a wide range of fora, across The UK, EU and Asia Pacific as well as in a range of international institutions. This has been achieved across a wide range of sectors and issues. He also has substantial experience of formulating and executing integrated engagement strategies using a diverse range of media with a clear track record of success. Presently, he is working as Public Policy Manager (Asia-Pacific) in GSMA. In an event organized by Zong at Islamabad Club Pakistan, Henry Parker talked about “Delivering digital inclusion via mobile: affordability, availability and other key barriers to connectivity (Henry Parker, GSMA)”. The Phone World team got a chance to take an exclusive interview of Henry Parker, in which he shared his valuable thoughts on Pakistani telecom industry and its performance.

PW: In your opinion what role the Government of Pakistan can play to increase the “Digital Inclusion” in the country?

Henry Parker: I think there are two key roles for the Govt. to play. Firstly, it has to facilitate the growth of infrastructure as the Govt. of Pakistan has already discussed in its newly devised “Telecom Policy of 2015” that it will work hard to support the growth of networks. Secondly, a key role played by the govt. which we also highlighted today is that for mobile broadband connections we have to make the access to the devices more affordable for the ordinary citizen. This agenda is also discussed in our report “Digital Inclusion for All: Promoting the Growth and Development of Pakistan”. We actually believe that for a larger number of Pakistani, the prices of the smartphones are not affordable. Our key findings include that the tax paid on a SIM card is about 30% of the daily wage in Pakistan that is forth higher in the world. This tax is controlled by the Govt. so if the Govt. wish to see a more “Digitally Included” country then it has to look for the issue of tax. [blockquote align=”right”]Our key findings include that the tax paid on a SIM card is about 30% of the daily wage in Pakistan that is forth higher in the world. This tax is controlled by the Govt. so if the Govt. wish to see a more “Digitally Included” country then it has to look for the issue of tax.[/blockquote] 

PW: Foreign Direct Investment in Pakistani telecom sector showed growth after a long time. How in your opinion Pakistan can overcome the uncertainty in the “regulatory environment” to strengthen the telecom sector?

Henry Parker: the implementation of Telecom Policy document will work long way. GSMA has responded well to Telecom Policy document and we generally think that it will help in number of ways to resolve the regulatory uncertainties that did exist previously in Pakistan. When we were last in Pakistan in November, 2014, we came to know that the Govt. and telecom operators are facing few regulatory challenges in working together. Apart from IT Ministry and PTA, there are some other ministries that are also involved and whose cooperation is required for smooth functioning of the regulatory environment. For specifically tax issues, our report has highlighted number of ways to overcome the irregularities of telecom sector. 

[blockquote align=”left”] GSMA has responded well to Telecom Policy document and we generally think that it will help in number of ways to resolve the regulatory uncertainties that did exist previously in Pakistan.[/blockquote]

PW:  What are your views on the “Telecom Taxation” in Pakistan and how it can be improved?

Henry Parker: Firstly, every industry has the responsibility to pay tax. We didn’t mean by any ways that telecom sector should not pay tax what we say is that through few simple reforms the Govt. can actually in long terms can look for it. SIM taxes should be reduced in Pakistan.

PW: How will the next spectrum auction affect the mobile broadband services and what further opportunities will it create for the ICT sector?

Henry Parker: I didn’t get any notification or firm proposal about the spectrum auction. But what I can say is that if the Govt. announce the left-over spectrum auction then it is the responsibility of all operators to look for strategies through which 3G/4G networks can be more expended and hence invests more on it. As the tax environment has a direct impact on the returns of that investment, so if the Govt. expects to earn revenues from the auction then it must provide the operators with some incentives as well.

PW: You’re concluding remarks.

Henry Parker: Well! I can conclude that there are number of different aspects to the “Digital Inclusion” debate, which we tried to touch on today. You can make devices more affordable in Pakistan and you can also expand networks by applying different effective strategies but above all the role of Govt. is very important in addressing the main issues like i) Digital literacy of the people i-e, to use to devices effectively ii) Understanding the use of internet iii) There must be incentives for locally produced content and applications to emerge. So this is actually a huge debate and for this purpose Govt. and industry need to work in collaboration to deliver new initiatives for the betterment of ICT sector. 

Henry Parker (GSMA)

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