ISLAMABAD: The telecom sector on Thursday urged the government to rationalise duties and taxes to reduce the cost of doing business which would eventually make telephony and internet services cheaper in the country and help expand these services in unserved and underserved areas.

The 2021-22 budget proposals forwarded by the telecom sector to the government identified rationalisation of duties on imported equipment, Federal Excise Duty, General Sales Tax (GST) on Services levied by the provinces and the Withholding Tax (WHT).

The proposal noted that 12.5 per cent WHT was collected from all telecom users regardless of their income tax liability. Out of over 100 million telecom users, only 2.90m of them were filers while the majority belong to the non-taxable income group and do not even claim it back.

The telecom industry highlighted that tax ratio was high in Pakistan which was restricting digital growth as per the potentials available in the country.

The budget proposals referred to high taxes at recharging of balance for a pre-paid consumer. At the recharge of Rs100, only Rs74.38 was available for airtime, while further taxes and duties are deducted for each calls, SMS and data usage.

The telecommunication industry has asked the government to restore SRO 575 so that CD is reduced to 5pc while ACD and RD should be abolished.

Published in Dawn, June 4th, 2021