Only a few days ago, Government of Punjab gave us a relief from the on-and-off 19.5% tax that has long been in place for KPK and Sindh. Today, however, Federal Government has silently invoked a 14% tax on the internet connections in Pakistan. These included both wired and wireless connections.
According to the source, this move comes directly from the president of Pakistan who has approved a 14% Withholding Tax (WHT) on internet services with effect from June 29th, 2015. Moreover, members of the National Assembly made this suggestion. The tax had been silently activated on internet connections in Pakistan since July 1st and ISP’s have already acted upon the raise.
We did cover this story earlier, with sparse information, but this is where we finally have proper details and more information about the tax. Details on how it will affect users and dates. So if you were previously curious on developments to the previous story, you can read on.
Below is the screenshot of the details on the tax, taken from here. (Page 365 on the document, clause C, sub-section (b)):
In order to calculate the affect of tax on your Internet bill, simply multiply your current bill with 1.14, e.g. 2500 * 1.14 = 2850 PKR. You can claim back WHT at the time of Tax Filing but these taxes are useless to claim back since the majority of the market share of internet consumers belongs to domestic household users who aren’t earning an income.
Currently, ISP’s are following this tax on pre-paid connections while postpaid connections to be followed from August 2015 onwards. This comes as a shock to many prominent figures of the telecom industry too as Ms. Anusha Rahman, Minister of State of Information Technology and Telecommunication, wasn’t herself aware of this tax. She was against the imposing of taxes for the 2015-16 budget but did, however, discuss the matter with Mr. Ishaq Dar regarding the tax in efforts to minimize or remove it.
Perhaps the biggest surprise that can be taken away from this new tax is how easy it has become to sneak a tax on technology now without the knowledge of IT Minister who is responsible for these kinds of taxes. For now, it is apparent that the 19.5% tax is done with, now we have to work against this new 14% tax for removal.
What are your thoughts on these constant impositions of taxes on the internet? Let us know in the comments below.