PTA to hire consultants over most efficient/effective tax model

ISLAMABAD: The Pakistan Telecommunication Authority (PTA) is planning to hire tax consultants to propose the most efficient/effective tax model in the telecom sector and a revised tax structure for cellular companies.

In this regard, the PTA intended to hire tax consultancy services covering key tasks i.e. (i) tax advice on existing tax structure; (ii) advice on the PTA’s existing tax structure and contractual arrangements in relation to its position within the telecommunication industry; (iii) proposing most tax efficient/effective model for accounting and (iv) tax status of various PTA matters with tax authorities and forums.

Scope of the tax services included, (a) preparation and filing of corporate tax return with Inland Revenue Department, including underlying Income/Sales tax computation on finalisation of accounts and revision of return, if required; (b) preparation and filing of refund application for a refund due, if any; (c) attendance before tax authorities including Inland Revenue department, Appeal authorities and tribunal, and responding to notices issued in connection with corporate/sales tax return and audit proceedings till finalisation of assessment for income/sales tax or FED; (d) assistance in giving tax credits as per Income tax ordinance 2001 and related Sales tax or FED, wherever applicable; (e) responding day-to-day notices and other correspondence with Inland Revenue, and applet authorities concerning items listed as ‘a’ to ‘d’ above; (f) help in interpreting and intimating of any changes in income tax, sales tax, federal excise and custom duty laws, if and when required.

The authority stated that it is mandated to regulate the telecom industry of Pakistan, issue licenses and create a fair regime in the telecom sector. Among other things, the PTA is also required to collect fees from operators providing telecom service under a license issued by the PTA, and income of the PTA is made taxable through an amendment in the ACT further such authorities were required to be taxed by finance ACT 2006.

Overall 34.5 percent tax on telecom users including 15 percent advance income tax (AIT) and 19.5 percent GST, Pakistan is among the highest-taxed telecom markets in the world, while it ranks second highest in telecom taxation in South Asia. The exorbitant taxation on telecom services is detrimental to the digitalisation drive for the economy.

Understanding the importance of affordability of mobile ownership and the internet in a forward-thinking move geared to push for development in the digitisation of all aspects of the economy including education, health, commerce etc, officials told Business Recorder.

Copyright Business Recorder, 2023