Telecom sector contributes over Rs 510b as taxes
By: Salman Abduhu
LAHORE: Telecom sector has contributed more than Rs510 billion as taxes in the last nine years but successive governments have squeezed the sector considering it a cash cow to hide their own inefficiencies.
Questioning the wisdom of economic managers of the government behind decision to slap additional tax on telecom industry, experts said that an increase of 5 per cent withholding tax can have an impact on foreign investment in telecom sector.
They said that India has imposed 10.3 per cent tax on telecom sector while Bangladesh has levied 15 per cent taxes on it while in Pakistan all the taxes and duties will be 41.50 per cent from July 01 adding to the miseries of masses.
They said that the short-sighted decision will increase burden on masses, add to problems of telecom sector and hurt the reputation of PML-N.
An increase of 5 per cent withholding tax can have an impact on foreign investment in the telecom sector; it can hurt network expansion plans of the operators and compromise quality of the service, they said. They said that the decision based on fulfilling tax collection target of Rs2.475 billion can reduce communication between people paving way for poverty and other problems.
Pakistan Economic Watch president Dr Murtaza Mughal said that taxing the already heavily taxed sector can have undesirable impact on plan of the government to reduce budget deficit through auction of 3G licence.
He said that former government also unilaterally imposed Sales Tax on mobile phones hurting 85 per cent of the poor and middle-class consumers only to get around 50 per cent decline in sales.
Despite all odds, Pakistani consumers still enjoy economical calling rates in the entire Saarc region; however, days of affordable communications seems to be over, he said.