Telecom companies requested Federal government to offer relief in Taxation

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August 31, 2020
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The Telecom Operators of Pakistan has requested the federal government to provide concession in Tax so that they could increase their revenues. The operators moved a summary through Information Technology and Telecommunication Board to the ECC.

The summary contained a few tax relief measures including eradicating 12.5 percent of advance tax. It was deferred by ECC for the next meeting; however, some quarters advocated the decision in favor of the companies.

A local news resource contacted the PTA senior official regarding the matter. He said that the Federal government should investigate the tax incentive demands of the operators thoroughly. If the government wants to offer them tax relief, then they are obliged to provide the same benefits to the consumer. Otherwise, the act will be bolstered for the companies leaving the customers at their mercy.

The company asked for a reduction of the federal excise tax on the telecom services from 17 percent to 16 percent and withdrawal of Rs.250 issuance Tax on the sale of New Sim card according to the summary. Furthermore, the operators proposed the ministry to roll out a simple advance tax mechanism u/s 147 of ITO 2001. They also demanded exemption from all withholding /collection provisions under ITO 2001.

The ministry has been proposed to include the telecommunication sector in division III of part III of the income tax ordinance to grant relief of three percent instead of 8 percent on all the services.

The industry has been dependent on importing various tools under HS code 8517 and 8544. The sector requested for the abolishment of regulatory duty on the equipment. The reduction in addition to customs duty on raw materials from 20 percent and 7 percent to 5 and 3 percent was also requested in summary. The Prime Ministers’ Taskforce has also recommended the proposal on IT and telecom.

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