GSMA Asks Govt to Reverse Tax Hike on Telecom Services

The GSMA has asked the Government to reverse the recent tax hike on telecom services taken under the mini-budget. In a letter written to the Government of Pakistan, GSMA said that it is also damaging the economy. The letter has been addressed to Finance Minister Shaukat Tarin, IT and Telecom Minister Syed Amin Ul Haque, FBR chairman Dr Muhammad Ashfaq and Pakistan Telecommunication Authority chairman Amir Azeem Bajwa.

GSMA Asks Govt to Reverse Tax Hike on Telecom Services

It said the telecommunication sector was a key enabler for social and economic growth and Pakistan’s mobile market has significant potential, but current levels of mobile internet adoption, smartphone take-up and usage of digital services lag behind those of other countries in the region.

“By 2023, it is projected that the economic contribution of the mobile industry in Pakistan could reach $24 billion, accounting for 6.6 per cent of GDP. However, we wish to express our deepest concern regarding the reversal of the tax reforms in the 2021-22 Finance Bill by increasing WHT from 10pc to 15pc in the mini-budget that has been approved by the cabinet,” the letter stated.

See Also: Ministry of Information Technology and Telecommunication Launches Pakistan’s First Free Studio for Digital Media

The government had announced to reduce WHT from 12.5pc to 10pc in the federal budget 2021-22 and further to 8pc in the next fiscal year. The GSMA has said that removing this withholding tax would promote accessibility to connectivity to the low-income group.

GSMA has commended Pakistan’s tax reform measures that were approved in the budget 2021-22.

It said that Pakistan has the widest gender gap of 34pc in mobile ownership and 43pc for mobile internet use as compared to the regional countries.

Sector-specific taxes, such as those on smartphones and data usage, influence retail prices and may have a strong impact on the poorest consumers, especially women, lessening their ability to become mobile broadband subscribers.

Connectivity has never been more important as the pandemic has highlighted its need and will continue to be even more essential moving forward, it observed.

“Due to its negative impact this increased tax levy presents a significant risk of the government achieving the Digital Pakistan vision,” the letter said.

Check Also: MoiTT Proposes a ‘National Disaster Telecommunications Plan’ to Cope up with Emergencies

Source: Dawn News

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Onsa Mustafa

Onsa is a Software Engineer and a tech blogger who focuses on providing the latest information regarding the innovations happening in the IT world. She likes reading, photography, travelling and exploring nature.

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