LAHORE: The Punjab government has decided in principle to impose 19.5pc tax on Internet use by mobile phone consumers. Internet Service Providers (ISPs) will remain exempted.

The decision has elicited criticism as people say the Punjab authorities have backed out of their commitment that no such tax will be imposed.

“The government has decided in principle to impose 19.5pc tax on Internet use by cell phone users. Keeping in view education and research aspect, the government has exempted the ISPs from this tax,” Punjab Revenue Authority chairman Dr Raheel Siddique told Dawn.

Asked why the Punjab government backed out of its earlier pledge, he said: “We fail to understand why Punjab is being criticised for this tax which is also imposed in Sindh and Khyber Pakhtunkhwa.”

He said the tax would likely to be imposed this week as the draft law was being whetted by the provincial law department.

The Punjab government on May 28 had introduced 19.5pc tax on broadband internet connection of Rs1,500 above and 2 Mbps above speed through SRO. The digital publishers and bloggers had launched a ‘blackout’ campaign to prevent the government from implementing this tax.

Punjab Finance Minister Dr Aysha Ghaus-Pasha announced during her budget speech that this tax had been withdrawn and a decision to the effect was taken in the cabinet meeting presided over by Chief Minister Shahbaz Sharif.

“This tax will be additional burden on the largest subscriber base residing in Punjab which includes 3G/4G users and mobile internet users with total share of more than 56pc of the overall country’s subscriber base,” a telecom analyst said.

He said it appeared that the Punjab government ‘smartly waited for an appropriate time’ to levy this tax. “On the one hand, the Punjab government is luring the youth by distributing laptops and, on the other, has imposed huge Internet taxes,” he said, adding the courts in Sindh and KP had stayed the collection of the Internet taxes.

Information Communication Technology Think Tank (ICT3) President Sohaib Sheikh told Dawn that tax on growing next generation technology would not go well for the industry when it was in a process of increasing their data customers. “The immense potential and opportunity that is directly linked with the 3G/4G growth and data usage will sadly be hampered and it will also effect the licensing of 3G/4G license that is to be auctioned,” he said.

Mr Sheikh further said the government should review its decision as both the operators and subscribers would be in difficulty.

Published in Dawn, July 27th, 2015

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