Telecom sector pays Rs109.05bn taxes -Pakistan Press Foundation (PPF)

Paksitan Press Foundtion

Telecom sector pays Rs109.05bn taxes

ISLAMABAD: Pakistan Telecommunication Authority (PTA) deposited Rs. 13.56 billion in the FY 2009-10 to the national exchequer, while telecom sector contributed Rs.109.05 billion in the form of taxes.

According to the Quarterly Report 2011 issued by PTA here on Thursday the contribution of telecom sector to national exchequer through taxes, duties and regulatory charges kept growing.

At the end of FY2010 the total contribution was over Rs. 109 billion of which almost 50 percent came from GST. In the first half of the FY2011 the total contribution to national exchequer was Rs. 56.3 billion, which was almost Rs. 49 billion in the first half of FY2010 showing growth of 15 percent since last year. It is, therefore, expected that by end of FY2011 the total contribution to national exchequer would be higher than the last year’s contribution.

According to an estimate, telecom sector contributes more than 90 percent share in total taxes by the services sector of Pakistan, which is now being diverted to provinces under 18th Amendment. Similarly, share of GST in total contribution from telecom sector is also very impressive where almost 50 percent of total contribution comes from GST collection.

Only in the first half of FY 2010-11, total GST collection was Rs. 23 billion, which was Rs. 21 billion in the same period of FY 2010. GST collection in telecom services mainly come from mobile sector and its share in total GST collection is 86 percent followed by basic services as 11 percent.

The Activation Tax contribution to national exchequer stands at Rs. 3 billion at the end of first half of FY2010-11, which was Rs. 4 billion in the same period last year. Main reason for drop in the activation tax is due to market maturity, there is time for the government to abolish the tax on operators to further strengthen its growth whereas to increase GST the government needs to reduce the existing 19.5 percent rate, so that usage could be enhanced, which would result in better GST collection.

Report stated that in contrast to the Pakistan economic situation the growth of telecom sector remained healthy and positive.
Source: Business Recorder
Date:6/3/2011