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KARACHI: The telecom sector and its customers have demanded relief from the government of Sindh by reducing the discriminatory high tax of 19.5 percent on calls, SMS, and broadband internet services.

While, the federal government is making efforts for a 'Digital Pakistan', all four provinces are charging higher services tax on the telecom services. The Sindh government, in its budget 2021-21 proposal, has maintained a tax rate of 15 percent on various heads of services across the province, however the tax rate on the services offered by telecommunication sector have also been still kept higher side at 19.5 percent.

Recently, federal government has withdrawn its proposal of imposing taxes on calls, SMS, and data services and also reduced the FED rate from 17 percent to 16 percent in the federal capital on the services offered by telecom and broadband operators aimed to facilitate the customers.

Telecom sector and its customers have urged the provincial government of the Sindh that it should follow the federal government by easing the tax burden on telecom customers.

According to latest numbers of Pakistan Telecommunication Authority (PTA), there are 183 million subscribers of various telecom operators in Pakistan. Overall 45.5 percent population of Sindh owns at least a mobile phone set in Sindh as per a survey by Pakistan Bureau of Statistics.

Karachi, the commercial capital of Pakistan, is estimated to have nearly 15 percent share of the overall subscribers' base in the country with the trend of highest consumption of the various services offered by the telecom operators.

Higher taxes on telecom and internet services in Sindh have kept the Pakistan's ranking high among countries with high taxation on telecom services. The reduction in tax rates will not only provide an opportunity for users to consume more calls, SMS, and data but will also increase the adoption of telecom services particularly mobile internet services in rural areas of the province.

In the past one and half years, the consumption of mobile internet and telecom services have significantly increased during the period of preventive lockdowns as telecom users shifted to online meetings, education, healthcare, ecommerce, and infotainment.

It is important to make telecom and Information and Communication Technology (ICT) services affordable for the masses in order to realize the government of Pakistan's vision for a 'Digital Pakistan', i.e. catalyzing a sustainable digital economy in the country at par with other nations of the world.

Copyright Business Recorder, 2021


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