20 Paisa Tax on Each SMS, GST Lowered to 19%, Sim Activation Tax Slashed to Half

Federal Budget year 2009-2010 didn’t bring exiting news for Telecom and IT industry. There are few major things that we want to communicate at this point of time

  • 20 Paisa Tax is imposed on each SMS – killing all packages. Meaning that for subscriber, minimum price for an SMS would be 20 paisas (that will go into Govt’s pocket)
  • GST has brought down to 19 percent from 21 percent. Industry demand was to bring GST down to 16 pecent
  • SIM Activation tax has been slashed by 50 percent, now new SIM Activation tax will be Rs. 250 which was previously Rs. 500. Industry had demanded to cut SIM activation tax by 100 percent.
  • Regulatory duty from handsets has been slashed, while custom duty has been brought down to Rs. 250. Meaning that total of Rs. 250 will be applied as taxes on each handset import.

For cellular companies, operating expenses will increase as we saw new taxes in multiple items, such an advertising.

We will be bringing analysis and industry feedback on these announcements soon. Stay tuned

Note: Changes in tariff with new taxes will be appliacble from July 1st, 2009

Update: SMS tax has been taken back by government of Pakistan

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

  • SMS tax has been applied at 20paisa/message. I guess this ALONE weighs higher than any tax relief.

    • kera khayal hai k tamam sms users ko kisi fix din protest krna chahiay. or jab tak tax ka decision wapis nhi lea jata protest kartay rehna chahiay. Govt. hum se cheapest communication ki facility cheen rahi hai. cellular companies ko bhi hamaray sath protest krna chahiay.

  • Mobilink kay chamchay, agar yeh baat hay tu calls par kyun nahi tax lagaya, aur jo sari raat kay packages hain un par kyun dihan nahi aya appki government ka, kay yeh youth ko kharab kar rhaay hain

    internet package jiss par app ki youth gandi movies diakhti hain uss par kyun nahi lagaya tax, sirf sms par hi jaagi hay government ki ghairat?

    logoo yeh sab mobilink ka kiya dhara hay, kyun kay uss ka koi package nahi hay aur woh baqion ko down karna chahta hay

  • “20 Paisa Tax is imposed on each SMS”

    Pakistan will be the first country where this is happening…..Go PPP Go….Aik kam tha hamarai pas :D wo bhi le rahai hain……. This will never happen i think…what you say amir bhai? Cellular companies will not accept it as described in link above.

    • Yes – cellular companies should boycott this anti-telecom budget as a whole. Government can’t be so greedy to fill it pockets by killing an industry entirely.

  • I fully support this 20 Paisa/SMS because it will control our youngsters upto some level. Pakistan was 2nd in the world with higest SMS traffic… Why we always leads in wrong things? Is this 20 paisa/SMS is so high to afford… Yes it is onlly bad for those who always sticks to the SMS and that is our 80% youngsters.

    Frankly speaking, in competition of telecom, our young generation is getting spoiled and this is effecting our over all Human Resource of Pakistan.

    I totally appreciate this step to control SMS traffic in country and letting Telecom sector to play positively. What was the problem when SMS was Rs. 2/-. But Unlimited SMS for Rs 1/- is not good thing for overall generation.

    Please understand Pros and Cons of this Cut-Throat Competition. If telecom keeps doing wrong things then Government has to intervene.

    • What a myopic view… do you know how much of the part the SMS has played in educating the poor of the country…. many have learnt to read english because of this device….

      Youth will find ten thousand other ways of doing the same thing.. why must the SMS be blamed.

    • yeah! n also if people consume too much wheat coz rice iz expensiv we should put tax on wheat too after all they should learn about a balanced diet. if kids sms too much their parents must deal with it stupid! instead of government collecting money for their hedious reasons.

  • 20 paisas on SMS will serve as a floor on SMS which Operators have been trying for quite some time. ZONG & UFone will feel the pinch and will have to make major changes in their tariff plans. On the other hand, reduction in GST will give more talk time for users. But the important aspect which has been ignored is With Holding Tax (10%). This levy can be re-claimed by the users, but the process is so cumbersome that no one bother – also the majority is not aware of this fact. GoP shall give due consideration to reduce the percentage for W.H.Tax too and give relaxation to users as most of the users does not even of fall in tax bracket.

  • Dear Cellular User, I guess you have reacted too much for Salim Khan’s comment. Your comment certainly portrays the sentiments of entire youth of Pakistan who were using SMS as prime mode of communication – I do understand your agony. However, some of your comments really made me skeptical about the mindsets of our youth i.e. watching X rated movies on net. Unfortunately, we always expect to change others without realizing our own responsibility in the community. The unethical behavior of us as a nation has led us to this stage where we have the worst people at the top leading the nation – this is not Pakistan’s destiny. Lets realize our own responsibility in the community and act sensible.

  • For those who think this SMS tax will promote norms and good values in our youth.

    Do you think budget is to control norms & values of the spoiled youth? If Government has that intentions then:

    1- Suggest them to intervene & stop 0900 numbers for friendships.

    2- Suggest them to intervene & stop parties that has young participants involved in drinking, abusing and unacceptable physical practices.

    3- Suggest your government to stop & filter ONLY & atleast porn sites.

    4- Suggest your government to stop gay parties in Islamabad, Karachi, & Lahore.

    But my dear, this is not just to earn money but also to stop the everyday compaign on sms against any unfamous act of the government which Government targetted especially, it learned this during Lawyers Movement.

    Down with PPP & any Government of Pakistan who are blood suckers for People of Pakistan.

  • This is unfair to impose the tax on SMS due to behind the hand of 2 companies. Now SMS is a way to express & share your views, comments information to each other. We conduct this act of Govt.

  • _____ it all – every1 knows its the ____ asif ali zardari who is _____ the nation –

    ALLAH TAAALA bhi pata nahi inko kab uuthaega

    [Comment edited by Admin]

  • 100 % agree with Ahmed…
    Govt ko agar youth ki itni he fikar ho to un packages par tax lagaye jo youngsters use kartay hain poori poori raat. Sms se kia kharab hona hai youngsters ne, Jo Mobile sex kartay rahtay hain poori poori raat. Agar itni he ghairat hai govt ko to un unlimited night packages pe tax lagaye ya ban karay.

  • _____ it all – every1 knows its the ____ asif ali zardari who is _____ the nation

    ALLAH TAAALA bhi pata nahi inko kab uuthaega

    [Comment edited by Admin]

    Not enough Admin, This comment should be deleted!!!

    • Further edited – the point for keeping this comment is to preserve the agony shown by ppl over the decisions that government makes.

      Hope it makes sense – Let me know if you think otherwise

  • nice say ahmad
    agree wih u.
    inhe awam aur awam k halaat se kia inhe to apni jaib se garz he.Khuda jald in se hmari jan churvay or ham pr rhm kre.down with all these agents.

  • Dear all,its totally unfair to impose tax on sms.As the only cheap way to communicate is sms and now the Govt is making it difficult for us to avail this facility.
    Personally i strongly disagree with it,and telecom companies should take strict action against it..

  • The way mobile operators irritate the tv viewers through advertisements after every single second should be controlled also :-) the companies have people who are paid for making a funny joke or poetry or dirty joke or quote and then circulate themselves and resent by users millions of times. I think it has both negative and positive side. Lets hope for no tax on emails.:) mobile companies also tease us daily by sending their package details.:) there should not be anything unlimited whether its sms or other :-) it can be harmful

  • Guys the sentiments expressed are true and account for the view of many of us.

    Please understand Govt will leave no stone unturned to earn a buck & please we all understand that they are not that socially & morally responsible to take such a step.

    Taxing SMS is down rite a unique thing, I have never heard of. By the way the idea of any one Telecom behind this looks absurd.

    What they (Govt) need to realize is that an Industry which is contributing so much should be facilitated & not brought under the brunt.

    I hope our leaders have the foresight to look what they have done.

  • Maybe this is the governments way of curbing down viral messages that belittle its leadership =P.

  • Shukar kro ke in bgairtoon ne 20 paise ka tax lgaya h..ye 1 rupay ka sms b kr skte the. Lgta h k PPP or Mobilink zaleel hone ka koi moqa gawana nhe chahti

  • We will not accept the addition of 20 paisa on each sms presented in the current budget.

    Lets begin protest
    ”bind the black strip on over arms”
    Till the Govt. take back the decision

    Please Infom to all and join in the protest.

  • I am really surprised that why you guys have an argument about sms tax.i know there are many other things in our society that should be stopped but i am really happy that at least government tried to stop one out of these.

    • I think it is appropriate to discuss about tax since this post is about sms tax issue. Well I appreciate if you can point out the other problems in our society. May be we discuss them here.

  • I think now the minimum price of a sms will be 39 paisa.
    20 paisa sms tax + 19% GST = 39 paisa

    its it right Aamir bhai?

  • ab ppp ko ek jaga aur tax lagana chahiye jahan se usey aur paisa miley ga , wo hai washroom istamal karney per tax , jis tara ye apni jaibey bhar rahey hain , awshroom janey pe bhi tax laga dein , in k account jaldi full ho jayein gey ….. ullu k …. !!!!

  • Looks bros and sis,

    Don’t think that any one is in favour of high GST + Withholding Taxes on Telecom sector and now a new way of getting extra money… rather sucking the left over blood of people.

    As far Mobilink is concerned, I dont think that it has that much influence to compel Government for additional taxes. I am writing with full knowledge. Rather Mobilink is the only company who is a victim of Government from last 4 years. Mobilink management don’t have guts to think for the company or people. They only thinks for themselves..means for their own pockets.

    If Mobilnik would be so influncial then Mobilink was the only company who totally opposed 3G implementation in Pakistan…but Government decided to do it because Telenor is the one who is interested in it and soon you will find 3G around you too.

    So dears, don’t wastes your energies in blaming one company or other company. Government it self is greedy and unable to collect direct taxes so applies maximum indirect taxes. Think on it. Regards,

  • I hope people will respond to that. Recently SMS were not used that much used against Government. Jus complaining at Blogs is like Playing Flute in front of Deaf’n’Blind.
    Now even SMS packages can’t work with every SMS at more than 0.20+tax.
    I wonder what people were thinking when they voted for PPPP-May be they thought Benazir would come back if PPPP wins? And now, whole Pakistan including innocent Punjabis(ruled by PML-N) are bearing such nasty decisions.
    I wonder why Mobilink wants to face the warth-They know MNP is already making them loose customers-Now, do they want rest others to leave them too or what?

  • Govt Should take back this decision as soon as possible. the public of pakistan & Cellular Companies will not accept this bad decision of govt.

  • yar da industry has been hit v.badly nd it will hv a strong impact on da users nd da investers

  • Finally long awaited rumors are somehow translating into fact that sms prices are going up.

    Let’s see how our telecom companies react and what does actually happen, but 1 thing is for sure now that prices will go up for SMS no matter if it’s increased by 20paisa per sms or 10paisa per sms.

  • As salm alaikum
    the only way to protest against this harsh step taken by govt. just to boycott sms service, not to go with any sms from july 1st. No revenue will generate for govt as well as mob cellular companies…
    Thwn we’ll see how they enjoy their pockets full with 20 paisas tax…

    • Extremely impractical thing to say. Suggest somehting practical. Govt. wants ppl to stop using this service coz they think this service is used against them.

      • so give us suggestions we’ll follow d instructions. This is, I think this is d most effective and sober way to record your protest…

      • so give us suggestions we’ll follow d instructions. If govt is disturbed by this service due to sms against them, they should block this service at once…This is, I think this is d most effective and sober way to record your protest…

      • no…they jus wana earn money…thts it….agar wo itna hi hum se darte hote tou kbhi na aisi harkatein krte…

  • the cellular companies would be xtremely happy! the tax they pay to govt on sim activation has been halved! n witholding tax also reduced by 2% .that will make up for the 20 paisa on the sms as net effect will be higher profits for the companies.could aamir tell us which r the 2 cellular companies which r making profits? while the rest r not as was stated in a newsreports quoting a cellular company official a little while back.

  • I don’t agree with 20 P tax on sms. The services should be cheap no matter how people use them. Government is there to benefit people not to suck their blood. If you are talking pro and con then put tax on INTERNET because almost all of the users use it to watch porn videos or photos at least.


  • So now all the sms packages will be gone.
    I dont think that imposing 20 paisa per sms would do
    anything other than reducing the number of sms sent.

    People will send less sms and there wont be much revenue left for the government.
    If they really wanted to get some revenue they should have imposed tax between 1-5 paisas per sms.

  • 20 paisa tax on SMS minimal: Tareen
    Updated at: 1535 PST, Sunday, June 14, 2009
    ISLAMABAD: Advisor to PM on Finance Shaukat Tareen Sunday said the government had lowered duty over the telecom sector as the General Sales Tax (GST) had been brought down from 21 percent to 19 percent while only 20 paisas tax had been imposed on every SMS.

    Addressing the post-budget press conference, the Advisor said the government brought down duty on import of mobile phone handsets from Rs. 500 to Rs. 250 while the SIM Activation Charges have been also been lowered from Rs. 500 to Rs. 200.

    “Only 20 paisa tax has been imposed on SMS. You know, people today spend extensively on SMS – even more than that they spend on eating. This is a minimal increase as the government already has provided relief to the telecom industry,” he added.

  • totally agreed with the decision of Govt.

    I would suggest to increase the prices of calls as well so that to control its misuse.

    and all the night packages should be stop.

    PTA should develop some strong Proxcy servers on data network side to stop all porn sites..

    • Good point-

      why don’t we shutdown co education because that is best place for boys and girls to mix up. Why don’t we stop selling cola- and other chemical drinks. Why don’t we stop using morphine as a medicine. For God’s sake try to understand that everything comes with plus and minus. Educate people rather than putting taxes.

  • This is again a prove that Pakistani nation is a Geneous.
    We showed the world that Helplines can be charged & recharge is also a service provided by operators. No one throughout the world even imagined to impose taxes more than actual price of a service. Keep up the good work. MNC can impose such taxes in other markets

  • One thing is conformed that this decision will reduce sms usage. Also it will harm companies as well as the government as 21% GTS proved.
    Two way strategy can be followed to pressuresed the govt.
    1) Register Protest through sms, emails and letters to elctronic and print media.
    2) Also try to envolve Supreme Court of Pakistan. As majority of us supported Lawyers movement for justice. Now its Chief Justice turn to provide relief to people especially the youth of Pakistan. It was SMS compains which motivated people & forced the govt to reinstate the deposed judges. The people of big cities especially Islamabad, Karachi & Lahore can play a vital role in this regard

    • That is the problem. If the matter can be raised in Supreme court, then things can work out.
      But, since IMF is also a reason behind this 20 paisa tax, then it would be really difficult to get away from this tax.

    • Supreme court cannot be involved in every matter.
      It is not the the job of supreme court to impose tax or give tax relief.

      Elected government is responsible for it.

      • That’s right but SC has right to interfere every issue that is hurting people. No matter it is about taxes or anything else. See how SC reacted over gasoline prices. Unfortunately they didn’t meet our exceptions.

  • I think Telecom compnies increase only a few rupees in their SMS packages. No one care for 20 paisa when you are getting 500 sms in 4 rupees from Ufone and Zong Daily.

    • Telecoms offering 500 msgs for Rs. 4 and you have to pay
      500 x 0.20 = Rs. 100 tax.

      Would you like that???

  • Thats good. At least youth will get controlled with this. people who dont have a peny even those were messaging and disturbing people…It should be controlled.
    Can anyone tell me what about the prices of laptops? are they going to increase or remain same or decreasing?Any idea please let me know….?

    • Why don’t you strangle all poor people??? Please be careful with selection of words while giving a comment.

  • The cellular phone operators are not willing to accept the government’s offer to increase their SMS rates in order to get relief in the GST and SIM activation charges.

    The News has learnt that a meeting was held between CEOs of cellular companies and the adviser to the prime minister on finance Shaukat Tarin on Monday in which the adviser had linked the decline in GST and SIM activation to increase in SMS rates.

    All operators rejected the offer except one that is not offering bundle SMS package to its customers. The only beneficiary of the government offer would be that single company, which was unable to continue bundle SMS packages due to network issues, the finance ministry revealed.

    The SMS addicted youth would be the target of the government for generating revenue.

    Currently, if a company offers unlimited SMS for Rs3 per day the government earns only 0.21 paisa tax from this package. Once the SMS rates would be increased the bundle SMS packages would automatically end. Thus the government will earn taxes on every SMS which ever be the rates.

    On the other hand the share of SMS in total revenue generation is almost 8 per cent only while 92 per cent revenue is coming from voice services to the cellular companies. Thus the revenue of the company would also increased once the SMS rates would be reduced the people would increase voice services.

    The telecom industry and the regulatory authority PTA have already proposed to the government to reduce SIM activation tax in the upcoming budget 2009-10 to attract more foreign investment in Pakistan in the telecom sector.

    Sources in Federal Board of Revenue (FBR) said that a substantial reduction in SIM activation would be announced in budget but there is no proposal to reduce the general sales tax as this is the easiest way of collection GST for revenue generation.

    The mobile phone operators are demanding of the policy makers to bring the level of tax on telecom industry at par with other sectors, including activation tax for its speedy growth in the country.

    In the last year’s budget, the federal government had increased general sales tax (GST) to 16 per cent from 15 per cent, however, the telecom industry was the only industry which had been imposed a 21 per cent GST.

    • Aadul Pitafi,
      Put some light on that learning, as your government has allocated only 2.5% for education, Don’t you think all sports should also be banned?

      Why just this idea of yours in Pakistan only, why not pushing government to raise a motion in UN to ask governments to increase SMS tarrif worldwide so people can do something as you have suggested.



  • This incompetent government seems determined in choking one of the few beacons of hope in this economy! They have found an easy way to meet revenue targets according to the dictates of the IMF.

    Now that the MMS service is starting to take off in this country, hopefully the telcos will offer MMS packages instead of the SMS packages if MMS is not affected by this scheme.

  • i don’t think its applied because the sms packages are running the way they were no change in them. What i think its a rumour.

    • the tax would be effective from 1st July.
      Thats why there is no change in the package at the moment.

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