Since the telecom sector in Pakistan has been classified as a “industry,” the federal government will offer a tax reduction on cell phone users in the region.
According to a tweet from the Ministry of IT and Telecommunication, the federal cabinet accepted the request based on the ministry’s recommendations. The ministry stated that taxes on the telecom industry and cell phone usage will be reduced gradually.
“This is a significant achievement that will support not only mobile phone users, but would also help extend the mission of Digital Pakistan (connectivity) to remote areas,” said Syed Aminul Haq, Federal Minister for Information Technology and Telecommunications.
On recommendations of the Ministry of IT and Telecommunication, the Federal Cabinet has approved the Introducion of simple and easy tax system and exemption of the telecom sector from all withholding taxes and complex collections.#MOITT #taxplanning pic.twitter.com/Kb5oo0TD3D
— Ministry of IT & Telecom (@MoitOfficial) March 14, 2021
Under the major development, the government will impose tax reduction on the advance income tax on cell phone users from 12.5 percent to 10 percent starting in the fiscal year 2021-22, and then to 8% in the fiscal year 2022-23.
Similarly, the federal excise duty (FED) on telecommunication services has been lowered from 17% to 16%, according to the Federal Minister for Information Technology.
According to Haque, the government plans to cut excise duty by 6% and lower taxes on a range of services. “The Rs250 fee on sim purchases has been removed, which would benefit the general public.