Ministry opposes proposed GST on IT -Pakistan Press Foundation (PPF)

Paksitan Press Foundtion

Ministry opposes proposed GST on IT

KARACHI – The Ministry of IT and Telecom has come up with opposition to the proposed 15 per cent General Sales Tax (GST) on the IT industry in the upcoming budget and hopes its concerns would not go unheard.

The IT ministry, which has been forced time and again by the IT industry, has finally approached the authorities in the finance ministry, opposing such development.

“I personally have taken up this issue with the finance ministry,” said Awais Ahmed Khan Leghari, when reached over telephone.

“In this regard, consultations were held with the IT industry and the consensus against the imposition of GST was conveyed formally to the finance minister,” he added.

The minister sounded confident as he said that the budget authorities hopefully would consider the telecom ministry’s recommendations by not announcing any step hurting the infant industry.

“The response has been very encouraging and hopefully the issue would be solved amicably,” Leghari added.

The news regarding GST imposition on IT industry in the upcoming budget 2004-05 buzzed the quarters concerned last month, which pushed the stakeholders to take up the matter with the IT minister who has finally done their desired job.

Almost just over a decade old IT industry of the country has so far been enjoying tax holiday. The IT sector stakeholders are even free to import computers related equipment without any pre-permission from Pakistan Telecommunication Authority or any other government organisation as the Authority has withdrawn the condition last year.

Apart from GST issue the IT ministry has also recommended over Rs1 billion allocation for the development of the sector.

“For the annual budget 2004-05, we have recommended an approximate Rs1.596 billion for the development of IT sector,” said the IT minister.

He informed out of this budgetary demand, Rs968 million had been proposed for the ongoing IT projects while Rs184.94 million for the newly approved ones.

“In addition, Rs443.33 million have also been sought for the new projects which are being prepared by the ministry, but are yet to be approved,” he elaborated.

In budget proposal, Leghari said there were also recommendations for the development of country’s telecom sector, which is expected to become competitive in the wake of deregulation.

“For the telecom sector, the ministry has recommended a total budget outlay of Rs1.236 billion of which have been sought for the ongoing projects while Rs205 million have been recommended for the project, we have approved recently,” he added.

The country’s deregulated telecom sector is expected to take off following budget announcement. The telecom watchdog PTA has already received around 100 applications from local and foreign companies intended to initiate landline telephone operations in the country.

Licencing of telecom companies would break the over 50-year-old monopoly of the state-owned Pakistan Telecommunication Company, currently enjoying the whole business of country’s landline telephone operations. The World Bank estimates that telecom deregulation in Pakistan could attract investments amounting to US$8-10 billion.
Source: The News
Date:6/5/2004