Sindh Government today announced that it is reducing services tax on Telecom sector from 19.5% to 18%, starting July 1st, 2015. After new tax-rate, telecom customers are likely to save Rs. 0.93 on each Rs. 100 card load from July 1st, 2015.
For those who don’t know, after National Finance Commission Award, services are taxed by respective provincial governments where they are given freedom to adjust tax rates individually and separately.
Till now, all provinces (and federal government) were deducting 19.5% taxes on telecom services, however with this move from Sindh Government, taxes on telecom services in Sindh province will come down to 18%.
It won’t be out of place to mention that taxes on telecom sector in Pakistan are 4th highest in the world.
Telecom industry, that has welcomed the decision, said that this reduction in taxes should have been rationalized by bringing telecom sector taxes in-line with other sectors that are taxed at 15% in Sindh.
They further urged that other provinces should also bring down the tax-rate for telecom sector for synchronized tariffs throughout Pakistan.
Telecom companies said that these taxes are paid by customers and its only the end user of all sorts that is going to get benefited by these tax reductions.
As per telecom operators, after this reduction in taxes on telecom services in Sindh, a telecom customer will be able to save Rs. 0.93 on each Rs. 100 load, which is nominal but a good gesture by Sindh government.
I wish the government of all provinces reduced it to something like 10% or so. It will really be more encouraging! And also, it will make the 3g/4g packages a bit more in our reach ;)
that’s real good
Chalo koi to thandi hawa ka jhonka aya :)
And what about 14 new Sectors which they r planning to tax. like comercial shops have to pay 6% tax on their rents and other peoperty taxes on shop keeprs
//Telecom industry, that has welcomed the decision, said that this reduction in taxes should have been rationalized by bringing telecom sector taxes in-line with other sectors that are taxed at 15% in Sindh.//
Yeah right, the telecom industry also charges 5%+5% = 10% on all car loads as their service fees, that doesn’t happen all over the world. Why not they abolish this first and then talk about tax?
They should, no doubt about it. But what else would they do, if the prepaid market is so volatile and competition is so high? The sales teams have targets to meet, and its cutthroat for them. What they are doing is at best be called deceptive marketing. They tell you they are giving you this many minutes for say Rs. 5, but cover their margin through 10 to 12% upfront deductions, on account of admin/maintenance/bla-bla charges. Does it make any sense that a necessity like telephone should be taxed at almost 20%, and a predominantly “entertainment” media – internet – be exempt???
Taxes on telephony services should be normalised, period. As for your concern, PTA and Competition Commission should slap these telcos for deceptive pricing.
I agree to all of your points, except the part where you say internet is for entertainment only, you are gravely mistaken. Many people earn using internet, if the Govt lifts the ban on Youtube that earning could triple or more. Earning via internet means you bring home USD, a person earning $500 is providing more help to our cash starved nation than a person earning 50,000 in Pakistan.
Islamic system mein to 1% be tax nai hota aur vote do is western style anglo saxen democracy ko!
i think it is currently 18.5%
So, the greedy Punjab is the highest on taxes. PML N greed will never end. At lest some province has taken a lead for consumer relief.
Please note…. The Federal Excise Duty rate on telecom services is has been 18.5% since last year – applicable in Balochistan, Islamabad and AJK. It is not 19.5%.