ISLAMABAD: Telecom operators have demanded a reduction in advance income tax, federal excise duty on telecom services, and removal of regulatory duty on the import of dual-use IT/ telecom equipment in the Finance Bill 2023-24.

The recommendations were presented in the Senate Standing Committee on Information Technology and Telecommunication which met with Kauda Babar in the chair here on Friday.

The representatives of the telecom companies participating in the committee meeting presented recommendations for the Finance Bill 2023-24 which were referred to the Standing Committee on Finance of the Senate by the Committee for review.

The operators stated that in view of the foregoing and with intent to mitigate the impact of cost escalation to some degree, the Ministry of IT&T after thorough consultation with the industry and other stakeholders while fully keeping in view the overall economic situation proposed these key recommendations for the Finance Bill 2023-24. However, none of the recommendations have been accommodated.

They demanded that advance income tax of 15 per cent may be restored to eight per cent as it was provided for 2022-2023 in the Finance Act 2021. More than 90 per cent of the mobile users in Pakistan who are not in the tax net are being charged this withholding tax that they cannot even claim a refund of.

The matter has also been under judicial review and after years of convincing the government provided a reduction from then existing 12.5 per cent to 10 per cent in the Finance bill 2021-22 with a further reduction to eight per cent from 2022-23.

However, within six months the rates were again increased this time to 15 per cent through mini-budget. This overburdening rate which is the highest among other similar segments of the economy needs to be reduced.

They further stated that FED should be brought down to 16 per cent as applicable before the Budget 2022-23. There should be a single FED/GST rate across the country, equal to the standard rate – 16 per cent – to discourage discriminatory taxation of the telecom industry. The operators recommended for removing the regulatory duty on voice, transmission, firewalls, modems and routers etc., falling under the following HS Codes. 8517.6210, 8517.6220, 8517.6230, 8517.6240, 8517.6250, 8517.6260, 8517.6270, 8517.6290, 8517.6950, 8517.6970, 8517.6990, 8517.7990.

Regarding the Personal Data Protection Act 2023 introduced by Senator Dr Afnanullah Khan, the additional secretary of the Ministry of Information Technology told the committee that according to the instructions of the committee, the ministry has on June 13 sent the bill to the Law Ministry for opinion. “We have also contacted the security agency and the legal team of our ministry has a meeting with them.”

The official further stated that the ministry is very interested in this bill. Some instructions have also come from the Prime Minister's Office. The chairman committee said that this bill is very important and it is better that the officials of the Ministry of Law and the Ministry of Information Technology sit down with Senator Afnanullah and bring the bill.

Regarding the details of the overall fund and expenses of the Universal Service Fund, Senator Kamran Murtaza said that services are not available on most of the highways of Balochistan province. It is the largest province but the people are facing serious problems in this regard. The concerned authorities told the committee that there are many places in Balochistan where services are not available. The main reason is that the province is very large in terms of area and less in terms of population. Operators are less interested.

The USF is doing its best to resolve this issue. Three highways have been fully serviced and a national roaming package is being introduced which was approved last November. It is hoped that the matter will be settled in the next two to three weeks. This will bring significant improvement and the USF is focusing on underserved areas.

Copyright Business Recorder, 2023

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