STAFF REPORT ISB: ISLAMABAD: State Minister for Information Technology Anusha Rehman has said that the government needs to rationalise taxation on the telecommunication sector to encourage further investments.
“The current taxation mechanism is strangulating the business environment for cellular companies,” she told the National Assembly Standing Committee on ICT explaining that telecommunication companies were hesitant to expand.
According to her, there is taxation on almost everything; on every service and every imported piece of telecom equipment etc, whether it is federal excise duty or sales tax or in the form of advance taxation.
The minister said that federal and provincial governments had separate taxation structures that put burden on cellular operators that were eventually passed on to subscribers. She mentioned that the Punjab government had removed the 19.5pc taxation on broadband services. Pakistan has moved from a separate information technology and telecom structure into a single information and communication technology (ICT) environment.
“In a mere two years, the broadband base in Pakistan has grown from an insignificant 3pc to 15pc (or 25 million subscribers) and growing, as ICT has becoming a common usage tool,” the minister said. The minister also quoted the international GSM news, which described Pakistan as having the 2nd highest taxation structure in the world.She added that provincial governments had been harassing IT businesses for taxes other than what the federal government was charging the sector.