PTA to Press Provinces for Removal of Internet Taxes

After Punjab’s rigidness in maintaining internet taxes despite several promises of removing them altogether, Pakistan Telecommunication Authority has decided to approach provincial governments itself in order to convince them to remove internet taxes.

Business Recorder, while citing a senior regulatory official, reported that PTA has finally decided to make a move as the downward trend in telecom sector, mainly due to these taxes, is jeopardizing the chances of any 3G/4G auction that government is planning to conduct during next few months.

Mobile phone companies have already said that they aren’t considering participation in any spectrum auction as the investments they had made during past two years were only met with new internet taxes. In such a climate, further investment doesn’t make any business sense.

Keeping in view the prevailing situation, PTA has apparently moved to approach Punjab, KPK and Sindh to enlighten them on the worsening situation of the sector that contributes the most towards national economy.

Internet Taxes in Pakistan are As High as 33.5%

Just in case if you don’t know, KPK and Punjab charge 19.5% sales tax on internet, while Sindh Charges 18.5% tax on internet.

Additionally, there’s 14% withholding tax that internet users have to pay to federal government.

In total, internet taxes amount to around 33.5% in KPK and Punjab while it’s 32.5% in Sindh.


Internet Taxes are Negatively Impacting the Telecom Sector

For the first time since deregulation of the telecom sector in 2003, revenues of Pakistani mobile phone operators showed a negative growth during last fiscal year (2014-15).

Also Read: Thanks to Taxes, Telecom Revenues & Tax Contributions Decline During 2014-15

Not only this, telecom sector’s contribution towards government taxes also declined (during 2014-15) to prove that the very purpose of taxing telecom services back-fired and government collected lesser taxes from sector as compared to previous year. However, no one at the government level is concerned or even considering these figures.

More details in below infographic:


Internet Taxes Else Where in the World

No one taxes the internet which is considered as a basic right. In fact Pakistan is only the second country — after Bhutan — in the world to tax internet services.

Countries make all sorts of efforts to make sure that internet is affordable to their masses due to the proven fact that internet access grows the GDP of a country from 0.4% to 1.5% with higher impact for developing economies like Pakistan.

Estimates show that internet taxes could cause Pakistan’s economy an estimated loss of Rs. 200 billion during next five years.

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

  • The question is, will the removal of taxes bring a significant reduce in the prices of internet packages or the companies will just use the save in tax money to up their profit margins…

    • Mobilink increased rate of weekly package from 60 to 71 AFTER tax.

      I am sure, they will happy return to 60 if idiots remove the stupid tax.

      • mobilink has changed their packages applicable from 4th November
        new packages are not affordable at all

  • The clear verdict is that tax authorities has been failed to collect the massive tax from business community. In order to reduce budget deficit they are relying heavily on telecom sector. On the other hand it will be not be wrong to say that our total economy rest over the taxes collected from this manner.

  • There was no sales tax on Internet in Punjab before this budget only Sindh and KP was charging. So either it should be waived off in the whole country or should be taxed in Punjab too. There should be a unified policy. No discrimination.

  • Ishaq Dar the bloodleech will tax us to death.. Seriously, he is the one who is rigid in maintaining internet taxes because he thinks he can easily tax it because no one will bat an eyelid while the masses suffer because of his leeching policies. Afterall, he is a relative of Nawaz Sharif the biggest leech in the history of four-legged creatures.

      • LoL, I am 40 year old. Provincial or Federal, he is in charge. So stop taking sides mate. Think about the people not the government. Government is for people and if people are not happy, the Government should resign…! Without Finance minister’s consent, nothing happens in Ministry of Finance. Pakistan is following one unit model. :)

      • Dollar minister has brainwashed you. I’m surprised how effective dollar dar is. He is literally destroying Pakistan while Pakistani are bent over with their shalwar down.

  • How do I remove WTH tax on the damn bill? No one in my family work as they are living on retirement saving. The kutta government takes money from pension, paying useless CDA water bill when we don’t get a single drop of water, paying paying property tax for having broken roads and no working street lights.. WTH

  • Hara’m Dar has done another successful meeting with Jewish IMF to further put the burden of loan on people and ultimately further tax the nation to collect money to return loan with high interest rates.

  • Our Poltictian don’t want to give facilities to odinary people, and these politian are billionaire and they already collect money for their next 7 generation
    And and and now they are collecting money for next life—- mean gravyard
    It seems when these people will die, these people will go with money in graveyard

    Punjab govt ke shahbaz sherif ki speech suno
    Ke pinjab ko woh paris london aur istumbul bana de gai but shahbaz sherif know very well
    What kind of facilities in london paris and istumbul, ask from showbazz sherif kya london paris aur istumbul mein kya 18% tax hai mobile Internet per on those cities
    European union want to give free Internet in next five years in while europe
    And this punjab govt is most corrupted to put 18% tax and ordianary people student can afford these facilities
    Shameful just this punjab govt and federal govt—————

    I am sur PTI (imran & co) are educated people and they will take notice of this tax and they will crictize of punjab + federal govt policcies in parliament and PTI should debate arise this issue in parliament———-

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