The federal government of Pakistan has proposed to impose an increased federal excise duty on phone calls. In response, many individuals and groups in Pakistan have flanked the government for this new imposition. Even an international body, the GSM Association that represents the interests of mobile network operators around the globe has also asked the finance minister to remove this new duty.
GSMA Asks Finance Minister to Remove FED from Phone calls
GSMA’s head of Asia Pacific, Julian Gorman said that the new FED will have a debilitating effect on demand and perspective of development for the telecom sector. The Global System for Mobile Communications (GSMA) has written a letter to Finance Minister Shaukat Tarin asking him to waive off the Rs0.75 FED per voice call exceeding 5 minutes. According to Mr. Gorman,
This new levy creates uncertainty while the mobile sector is planning long-term investment as part of planned spectrum auction presenting a significant risk for the government achieving the Digital Pakistan Vision.
He recalled that over the last few years, the Government and the mobile sector have negotiated to reduce the mobile sector taxation to boost Pakistan’s transition into a digital economy. However, on the contrary, he expressed his concerns regarding the introduction of a new levy in the Finance Bill 2021-22. Mr. Gorman further said,
The telecommunication sector was the key enabler for social and economic growth and these tax reforms will contribute to spread the benefits more widely within society.