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]

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