Technology and Business News from Pakistan

Telecom operators are requesting relief from taxes and duties


Telecom operators have made requests for changes to made to the Finance Bill 2023-24. During a meeting of the Senate Standing Committee on IT and Telecommunication, the representatives of the telecom companies presented their recommendations, which included a reduction in advance income tax and federal excise duty on telecom services. They also called for removing regulatory duty on importing dual-use IT/telecom equipment. The Committee has referred these recommendations to the Standing Committee on Finance of the Senate for review. The telecom operators claim that the Ministry of IT&T proposed these recommendations after thorough consultation with the industry and other stakeholders. They hope the suggestions accepted to mitigate the impact of cost escalation.

One of the main concerns raised by the telecom operators was the advance income tax. They demanded that the rate restored to 8% from the current 15%. They argue that more than 90% of mobile users in Pakistan who are not in the tax net are being charged this withholding tax, which they cannot claim a refund of. The operators also called for the federal excise duty to reduced to 16%, as applicable before the Budget 2022-23. They suggested that there should be a single FED/GST rate across the country, equal to the standard rate of 16%, to discourage discriminatory taxation of the telecom industry. Additionally, they recommended removing the regulatory duty on various items falling under certain HS Codes.

Regarding the Personal Data Protection Act 2023, the Ministry of Information Technology has sent the bill to the Law Ministry for review. The officials from the Ministry have also contacted the security agency, and a meeting has scheduled to discuss the bill. The chairman of the Committee stressed the importance of this bill. He requested that the Ministry of Law and the Ministry of Information Technology officials meet with Senator Afnanullah to bring the bill forward.

During the meeting, Senator Kamran Murtaza raised concerns about the lack of telecom services on most Balochistan province’s highways. The authorities explained that there are many places in Balochistan where services are unavailable due to the province’s large area and low population. However, the Universal Service Fund is working to resolve this issue. Three highways have fully serviced, and a national roaming package introduced in the next few weeks to improve connectivity. The USF has committed to focusing on underserved areas to ensure everyone can access telecom services.

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