Punjab province is considering to re-impose a minimum of 19 percent sales tax on internet usage in the province, we are told by sources who are aware of the development.
While it is yet not confirmed, our sources said that Punjab Revenue Board is looking at options to re-impose the GST on internet usage, that it had withdrawn after pressure from telecom companies, ISPs and internet users in the province.
You may recall that federal government — in its budget for year 2017-18 — proposed a tax cut for telecom sector by slashing FED from 18.5% to 17% and WHT from 14% to 12.5%. Alongside these, the Punjab government was expected to drop GST rates on cellular telephony services as well. However, it appears that they want to impose the tax on internet services again.
It seems like the Punjab Government thought of the tax break as a temporary exemption and is now looking to re-impose the taxes on internet usage.
It must be noted here that 14% advance tax on internet is applicable across the country and any internet consumption is subject to advance tax. If 19% internet tax is imposed in Punjab then one third of entire internet cost will just be the taxes.
We are told that regulatory bodies of telecom companies and ISPs are in touch with Punjab Finance Minister, however, a decision is likely to be reached with-in next couple of days and announcement is going to be made soon.
It would be interesting to note here that Punjab houses more than 50% of Pakistani population and same is the case for internet users for the province that account to some 56% of entire subscriber base of the country.
Update
Punjab Finance Minister and Punjab Revenue Board is meeting with telecom companies and ISPs to discuss the matter of exemption of GST of internet usage in the province, we have checked with sources.
From what we are hearing, it is imminent that Punjab will re-impose GST on internet usage.
Not to mention, KPK and Sindh were already charging GST on internet usage and if re-imposed by Punjab, the smaller provinces (KPK and Sindh) are never going to withdraw this tax in life.