The GSM Association, an industry organisation that represents the interests of mobile network operators worldwide, has urged the Pakistani government to withdraw Federal Excise Duty (FED) on cellular calls

In a letter to Finance Minister Shaukat Tarin, Julian Gorman, Head of Asia Pacific GSMA, said that the imposition of additional FED will have a negative impact on demand and pose significant risk for the government achieving the Digital Pakistan Vision.

“We wish to express our concerns regarding the introduction of a new levy of Rs0.75 per voice call exceeding 5 minutes, as per the speech of the Honourable Finance Minister in the Senate of Pakistan on 25th June 2021 and later approved by the National Assembly as part of Finance Bill for 2021-22,” read the letter.

“The late introduction of such levy would negate the aforementioned tax reforms by raising the cost of mobile services, in particular for low income households. From an operational perspective, the new levy will significantly increase the compliance cost for the government and the mobile sector due to the challenge of implementing such tax.

“In addition, the new levy would create an additional barrier and slow the progress to close the usage gap.

“Furthermore, due to its negative impact on demand and perspective of development for the mobile sector this new levy creates uncertainty while the mobile sector is planning long term investment as part of planned spectrum auction presenting a significant risk for the government achieving the Digital Pakistan Vision.”

Currently, Pakistan ranks 90th among 120 countries and one of the lowest in South Asia, on the ‘Inclusive Internet Index 2021’ of the Economist Intelligence Unit (EIU). Similarly, broadband penetration stands at 46.5 percent, which means more than half of the country’s population remains without access to internet.

“We invite the Government of Pakistan to consider the removal of this levy. The GSMA remains available to engage further,” it added.