Finance

Customers demand tax relief on telephone, internet services in Sindh

By Muhammad Kashan Bhatti

Karachi, June 18, 2021: Customers demand from the Provincial Government of Sindh to reduce the discriminatory high tax of 19.5 percent on calls, SMS, and broadband internet services. The Sindh government maintained a tax rate of 15 percent on various heads of services across the province however the tax rate on the services offered by telecommunication sector have been kept higher at 19.5 percent.

Recently, Federal Government withdrew its proposal of imposing taxes on calls, SMS, and data services while it reduced the rate of FED from 17 percent to 16 percent in the federal capital on the services offered by telecom and broadband operators. Customers have demanded that the Provincial Government of the Sindh should follow the suit of Federal Government being the pro peoples’ party while easing the burden of telecom utility on the masses.

According to latest numbers of Pakistan Telecommunication Authority, there are 183 million subscribers of various telecom operators in Pakistan. Overall 45.5 percent population of Sindh owns at least a mobile phone set in Sindh as per a survey by Pakistan Bureau of Statistics.

Karachi, the commercial capital of Pakistan, is estimated to have nearly 15 percent share of the overall subscribers’ base in the country with the trend of highest consumption of the various services offered by the telecom operators.

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Higher taxes on telecom and internet services in Sindh have kept the Pakistan’s ranking high among countries with high taxation on telecom services. The reduction in tax rates will not only provide an opportunity for users to consume more calls, SMS, and data but will also increase the adoption of telecom services particularly mobile internet services in rural areas of the province. In the past one and half years, the consumption of mobile internet and telecom services have significantly increased during the period of preventive lockdowns as telecom users shifted to online meetings, education, healthcare, ecommerce, and infotainment.

It is important to make telecom and ICT services affordable for the masses in order to realize the Government of Pakistan’s vision for a ‘Digital Pakistan’, i.e. catalyzing a sustainable digital economy in the country at par with other nations of the world.

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Currently, Pakistan ranks 90th amongst 120 countries and one of the lowest in South Asia, on the ‘Inclusive Internet Index 2021’ of the Economist Intelligence Unit (EIU). Similarly, broadband penetration stands at 46.5 percent, which means more than half of the country’s population remains without access to internet.

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