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Thank you to the Punjab government’s move of imposing 19.5% taxation charges on internet usage, Pakistan has rocketed up to the first spot globally in terms of paying the highest taxes on telecom services. The cumulative tax percentage now is 53% broken down into 19.5% on Call & Voice services, 14% on with-holding tax and now 19.5% taxes on mobile and fixed line internet connections over 2Mbps.
Most of the countries globally avoid imposing taxes on internet services because of the immense benefits that it gives to the users at large and the value it adds to the economic and social fabric of society on a whole. It is sad to see Pakistan taking up the number one spot in terms of taxing telecom services globally. Due to the major developments on the telecom front, which saw Pakistan auction 3G/4G licenses last year and increasing mobile internet penetration to record high of 13 million mobile internet users.
IT and Telecom industry has heavily criticized the fresh imposition of taxes on internet usage. President Shoaib Sheikh of the Informational Communication Technology Think Tank (ICT3) has stated that the imposition of taxes will hurt mobile internet consumption throughout Pakistan. He stated that telecom providers will lack the incentive to accelerate the rollout of 3G/4G services throughout the country, restrict development and hamper our progress on the technology front. He demanded the Punjab government to withdraw these taxes in the upcoming provincial budget for 2015/2016 and consult stakeholders from the IT and Telecom industry to increase the rollout of next generation services at a faster pace.
All Pakistani mobile operators including China Mobile (Zong), Etisalat (Ufone), Abu Dhabi Group (Warid), Mobilink and Telenor have written letters to the Prime minister expressing their grave reservations in response to the internet taxation. All providers have pleaded to the Prime Minister to reverse this tax imposition on internet services as it will hamper the billion of rupees investment made last year for procuring 3G/4G licenses. PASHA, has also added its concerns, stating that it will hurt the budding entrepreneurs/startups using the internet to innovate and expand their business operations.
These taxes will only add to the woes of the users, and Techjuice firmly believes that the imposition will only negate internet usage throughout Pakistan.
