Huge Tax Relief Granted to Telecom Sector, Says Finance Minister

In the budget for 2021-22, the government is expected to announce a tax relief package for the telecom sector, including the status of industry, a reduction in advance income tax on mobile phone users from 12.5 percent to 10%, and then to 8% in 2022-23, a reduction in federal excise duty from 17 percent to 16 percent, the elimination of sales tax of Rs250 on SIM cards, and a reduction in services tax on telecom sector from eight to three percent.

The government had agreed in principle on the industrialization of the telecom industry and the progressive reduction of the onerous levies placed on the telecom industry and mobile phone customers, according to the minister.

However, the head of the Federal Board of Revenue (FBR) was reminded to include these changes in the budget recommendations.

Pakistan’s IT and telecom sector is now growing at a rate of 48 percent, and it has the potential to develop much faster in the next ten years. In 2001, India’s IT exports were worth $1 billion, but by 2010 they had risen to $100 billion. Pakistan has the potential to develop by at least 40% in ten years.

According to the minister, incentives will be offered to the IT sector in order to increase exports and create jobs after this tax relief in the package.