Telcos to Ask Govt For Reversal Of Withholding Tax On Cellular Services In New Budget

One of the most profitable and growing sectors of Pakistan is its telecom sector. The telecom sector has shown significant growth during the past few years. Each year government announced different taxes on telecom services keeping in mind the budget and potential of the sector. Last year, the government has announced a road map for the telecom sector in the budget 2021-22. The previous government has reduced the withholding tax from 12.5 per cent to 10 per cent in the last budget. This year it was supposed to reduce to 8 per cent from July 2022. However, the government announced to reverse its decision in January 2022.

Telcos to Ask Govt For Reversal Of Withholding Tax On Cellular Services In New Budget

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As of now, the government has changed. Shahbaz Sharif has become the latest prime minister of Pakistan a few days ago. Similarly, the new ministers for information and technology and finance are going to take charge in a few days. So, there are chances that the government will announce new taxes and regulations in the upcoming budget.

So keeping this in mind, the telecom companies are in a process of making the government agree to revise the increase in withholding tax on telecom services. The operators said that it has a huge impact of around Rs. 18 billion per year.

Pakistan currently has a 220 million population among which only 1 per cent of people file income tax. Although the majority of the country’s population has a non-taxable income, these people are paying withholding tax, which they can never claim.

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