ISLAMABAD: To boost the Digital Pakistan initiative, the government has decided to accord major concessions to the IT & Telecom sector by granting it the status of ‘industry’, with reduced taxes and duties, Federal Minister for Information Technology and Telecommunication Syed Amin-ul-Haque said on Thursday.

Various heavy taxes on the telecom sector will be reduced gradually, Mr Haque said at a press conference where he highlighted the decisions made by the federal cabinet earlier this week.

The cabinet has approved grant of the status of “industry” to the telecom sector in next fiscal year 2021-22, while advance income tax on mobile phone users will be reduced from 12.5 per cent to 10pc and will be gradually lowered to 8pc in FY23, he said.

All amendments in taxes and duties will be applicable from the next fiscal year starting from July 2021, including abolishing fee of Rs250 on the issuance of a new SIM.

Advance income tax on mobile phone users will be reduced from 12.5pc to 10pc and gradually to 8pc by FY23

Similarly, the federal excise duty on telecommunication services has been reduced from 17pc to 16pc.

The cabinet also approved the introduction of a simple and easy tax system and exemption of the telecom sector from all withholding taxes and complex collections.

The minister said the cabinet has also approved reduction of tax on telecommunication services from 8pc to 3pc for all telecom companies with PTA licence.

Mr Haque said the cabinet approved reduction of 4pc customs duty and 9pc regulatory duty on import of telecommunication equipment.

Taxes at import of raw materials related to optical fibre cable manufacturing will be reduced from 20pc and 7pc to 5pc and 3pc, respectively.

“These steps will speed up the implementation of Prime Minister Imran Khan’s vision of ‘Digital Pakistan’,” the minister added.

He also highlighted various steps taken by the government to enhance connectivity across the country including the approval of “Right of Way Policy”, mobile sets manufacturing policy and enhancement of Universal Service Fund (USF) projects.

The minister said that under the USF, the IT ministry has launched 32 projects worth Rs22 billion during the last 31 months of the present government, connecting 10,132 villages in 50 unserved and underserved areas.

He also said that Pakistan Software Export Board (PSEB) has received 40pc additional export remittances in the first six months of the current fiscal year, “By the end of June this year, IT exports will also cross target of $1bn,” Mr Haque said.

The minister added that 40 software technology parks have been set up in less developed areas such as Swat, Bannu, Quetta, Faisalabad, Karachi and Sukkur under the public private partnership.

Published in Dawn, March 12th, 2021