Illegal international calls: Telecom Sector Accused of Causing Heavy Revenue Loss

The Cabinet has accused the country’s telecommunication sector of inflicting heavy revenue loss to the government through illegal traffic of international calls and evading taxes and duties, reported Business Recorder.

As per paper, Cabinet made this judgment in its meeting on February 18 in Governor House, Lahore, while considering a proposal titled ‘Equal Treatment for Contribution in Research and Development (R&D) Fund’ for fixed line and mobile operators.

“Pakistan Telecommunication Authority (PTA) has recently imported latest equipment to check this unlawful practice,” quoted the Ministry of Information and Technology as stating in the meeting.

The Cabinet was briefed that with a view to developing indigenous information and communication technology and its human resource, deregulation policy 2003 provided for contribution to R&D fund.

Accordingly, all fixed line licensees and cellular operators were required to contribute @ 1 percent of gross revenue minus inter operator and related PTA/ Frequency Allocation Board (FAB) mandated payments.

Cellular mobile policy, approved by the Cabinet on 28th January 2004, prescribed R&D contribution for cellular operators @ 0.5 percent of gross revenue minus inter operator and related PTA/FAB mandated payments. Resultantly, an anomaly in contribution of R&D fund for fixed line licensees cropped up, which had been taken up by Pakistan Telecommunication Company Limited (PTCL) and PTA.

The Ministry of Investment, recently had recommended adoption of uniform policy; hence, the proposal for contribution of 0.5 percent for all fixed line and cellular operators.

During discussion in the Cabinet, details were sought regarding R&D fund collected, committed and utilised. The Cabinet was informed that that the programs under implementation did not appear to focus on research and development. However, it was emphasized that utilization of these funds should be restricted to the relevant sector only.

The Cabinet observed that in the interest of investment promotion, the government was obliged to ensure transparency and provide level playing field to all operators. Simultaneously, it was also emphasized that amendments in policy should not be perceived to benefit an individual company or sector of industry and level playing field for all be ensured.

Some Cabinet members were of the view that the proposal, if approved, would entail substantial decrease in R&D fund collection.

When the issue of illegal traffic of international calls came under discussion, a number of Cabinet members urged that the problem called for urgent and effective measures.

They argued that high rate of duty on terminating calls was cited as one of the factors motivating the telephone operators to evade taxes and duties. Sources said the Cabinet did not approve the proposal due to divergence in views expressed by the participants, which according to the Prime Minister viewpoint, necessitated comprehensive review of the matter.

However, the Cabinet, after detailed discussion, constituted a committee comprising Minister for Kashmir Affairs, Minister for Privatization, Minister for Industries, Minister for Science and Technology, Adviser to Prime Minister on Interior and Special Assistant to Prime Minister on Social Sector.

The meeting of the committee will be convened by Minister for Kashmir Affairs Qamar Zaman Kaira, who formerly was Minister for Information Technology. The findings/recommendations of the committee may be presented in the next meeting of the Cabinet.

via [Business Recorder]

Tech reporter with over 10 years of experience, founder of ProPakistani.PK


  • A Concerned Citizen of Pakistan

    Although I want to be as optimistic as possible after reading the above article I could not hold myself back, by replying to this article that some sarcasm included in that. first to fall I totally disagree with Pakistan telecommunication Authority and the cartel who is implementing or getting their view implemented on the government policy.

    While reading the article above first thing which comes to mind is why has the cabinet been sitting in the Gov. House, Lahore to make the decisions on IT and telecommunication, visit so that Mr. Gov. is so involved in this for making or I should say swindling money for his own benefit.

    As I have written many times before that market should be free and fair, let the market factors decide what the prices would be what is all this about the authority charging them a certain fee for providing the service. I fail to understand when are we going to realize that we are not on the right track with this. I guess at least not until the decisions of such kind are continued to be made in the Gov. House of Punjab.

    Coming to the import of the technology by the authority I think it’s a joke! I think they did the same by using the technology from InBox technologies which I remember was cracked within less then a span of a day. although I don’t have to figure for it did to me at the moment but I think it was definitely in millions of rupees and the achievement results of that are still to be seen.

    why are we so needed to reduce the such and development fund then I think it should be the backbone for the research and development which needs to grow in our country, is it that someone does not want us to grow or is it that some of us think that we have grown enough that we don’t need to grow. I guess it should be decided again by those only you have the authority and not by an ordinary person who still thinks that what we are doing is not right, and I am sure that when I say “we” the readers of this reply know what I mean.

    I hope that for once the throw behind our own personal benefit and interests in favor of our country. God bless Pakistan