GSMA Urges Tax Reforms to Promote Digitalization in Pakistan

GSMA is a global organization that represents the mobile industry. Recently, the organization has recommended tax reforms to the Ministry of Information Technology (IT) in Pakistan. GSMA wants to play a significant role in fostering digitalization in Pakistan.

GSMA Aims To Foster Digitalization in Pakistan

The GSMA’s suggestions aim to create a favorable tax environment in the country. The organization wants to promote digitalization and encourage innovation in Pakistan. That’s why GSMA has suggested tax reforms to the IT Ministry. Reports claim that the Ministry will now evaluate these proposals as part of their persistent efforts to advance the digital agenda and propel technological progress in the country.

According to the GSMA, the current tax structure levies a burden on digital services. It is a combination of taxes including a 34.5% tax on digital services, a 15% withholding tax, and a 19.5% General Sales Tax (GST). GSMA called for a reduction in tax rates especially targeting the telecom sector and digital services in the upcoming budget. The organization thinks that lowering taxes will encourage investment and facilitate the growth of the telecom and digital sectors in Pakistan.

In addition to that, GSMA also advises the implementation of a uniform sales tax rate throughout the country. It would definitely streamline the taxation system. Moreover, it will also create a more uniform and transparent environment for businesses operating in the digital space. Last but not least, another key aspect highlighted by GSMA is simplifying the tax system by reducing complexities and bureaucratic hurdles. GSMA believes that the comfort of doing business will improve, attracting more investment in telecom and digital services by doing so.

As the budget discussions continue, stakeholders and industry players are waiting for the government’s response to the GSMA’s recommendations. The government of Pakistan needs to recognize the importance of tax reforms in shaping the future of digital services and technology-driven sectors in Pakistan.

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