Sindh Govt to Reduce Sales Tax on Telecom Services

Sindh provincial government has initiated the process to reduce sales tax on telecom services to attract investment in the sector. This was stated by federal minister for Information Technology and Telecommunication Amin Ul Haque while talking to media persons here on Monday.

Haque said that the matter of high taxation on information technology services was raised with Sindh provincial government as companies were shifting to other provinces owing to high tax rates in the province. Sindh Chief Minister has agreed and got approval from the provincial cabinet to reduce GST on IT and telecom services, he added.

Sindh Govt to Reduce Sales Tax on Telecom Services

The minister further said that the Information Telecommunication (IT) and IT-enabled Services (ITeS) export remittances comprising computer services and call center services surged to $379.251 million at a growth rate of 43.55 percent during the first quarter (July-September) of fiscal year 2020-21 compared to $264.187 million during the same period of 2019-20. ITeS export remittances surged by 23.71 percent to $1.230 billion in the fiscal year 2019-2020 compared to $994.848 million during the same period last year (2018-2019). The government has set a target of $5 billion for export remittances through information technology and IT-enabled services during the next three years, he added.

Replying to another question, the minister said that the Rules for Removal and Blocking of Unlawful online Content (Procedure, Oversight and Safeguards) Rules, 2020 will be notified soon where government has no intension to restrict or disrupt the flow or dissemination of any online content unless necessary in the interest of glory Islam, integrity, security and defence of Pakistan, public order, public health, public safety, decency and morality.

All social media companies such as TikTok, Facebook, Instagram and Twitter will have to put up community guidelines for its users. Platforms with more than half a million Pakistani users will have to get registered with the PTA and establish a registered office in the country within nine months of the implementation of the rules, he added.

The minister said that within three months of the office’s establishment, a focal person will have to be appointed for coordination and a data server system has to be set up within 18 months.

Replying to another question the minister said that government has decided to release/auction additional available frequency spectrum for improvement of mobile broadband services and network expansion in the country which is expected to generate billions of non-tax revenue.

He said that revenue generation will be in billions as there is huge appetite in the market but the benchmark to be set by PTA through international consultant.  Additional spectrum release/auction will help enhancement of 4G services and subscribers base which is necessary for the successful launch of 5G technology in the country.

The minister said that he had proposed to include National Accountability Bureau (NAB) into the spectrum auction committee to ensure transparency, however NAB distanced itself from the committee.

About IT parks, Haque said that work is underway on IT Park in Islamabad and its groundbreaking will be done soon. He said that the IT Park in Gilgit has been inaugurated.

He further said that a proposal was under consideration with respect to suspending telecom operators’ contribution of 1.5 percent of their annul revenue to Universal Service Fund (USF); however no final decision was taken. The government as per its digital Pakistan vision is considering expanding the scope of USF and introducing e-education and e-health.

Haque said that the Ministry of IT was committed to the provision of broadband services in the underserved and unserved areas of the country. He said that information and communication technology was vital for the socio-economic development of the country.

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