The State Minister for Information Technology Anusha Rehman Monday expressed annoyance over provinces’ interference and collection of taxes on telecom sector while saying that it is a federal government jurisdiction and not devolved to provinces.
The issue was raised in the Senate Standing Committee on Information Technology and Telecom, which met with Shahi Syed in the chair.
Discussion from previous meeting was taken forward on how telecom companies (mainly the cellular companies) collect taxes from its consumers and how best to ensure that they transparently reporting and depositing all the taxes to the government.
Briefing the committee on tax deduction/collection on phone cards, easy-load from cellular companies, the Federal Board of Revenue (FBR) confirmed that it has no mechanism and capacity in place to monitor cellular companies’ traffic and real time access to ensure that tax deducted from customers were transparently deposited into govt kitty.
Expressing its concerns over the taxation measures the Committee also decided to go for legal interpretation and to seek legal help to resolve the matter.
FBR said that it has randomly conducted audit of some telecom companies but it would require forensic audit and will need technical expertise to ensure 100 percent transparency in collection and depositing of taxes, said FBR official.
Government is recommended to reduce tax from Rs 37 to Rs 25 on mobile cards in upcoming policy
In order to examine the authenticity of sales declared and taxes deducted the Large Taxpayers Unit, Islamabad in collaboration with Pakistan Telecommunication Authority has arranged a series of meetings with all telecom companies.
Based on the interactive sessions, report has been prepared which encompasses technical processes involved and describes mechanism and amount of taxes collected on administering of various voice and data services by the telecom companies.
Officials further said that ToRs for forensic audit have been finalized and expecting to establish technical system within 2-3 months.
The committee also expressed serious concerns over heavy taxation on telecom sector and urged for rationalizing it. State Minister for Information Technology Anusha Rehman said that a package is being under preparation to be shared with Finance Ministry to rationalize taxes on the sector. She further expressed concerns that telecom/IT is federal subject and not devolved to provinces, but they are imposing and collecting taxes.
The minister said that provinces had increased tax rates on broadband, but while accepting demands of industry and people, Punjab government has withdrawn taxes on broadband services.
Senator Rehman Malik recommended the government to reduce tax from Rs 37 to Rs 25 on mobile cards in upcoming policy as it is extra burden on people.
IT minister backed the proposal while saying that the issue has already been raised with the Finance Ministry.