Withdraw Taxes or We Stop High Speed Internet Rollout: ISPs to Govt

Internet Service Providers have asked federal government to withdraw newly imposed regulatory duty on Optic Fiber Cables if it wants FTTH (Fiber to the Home) to grow in the country.

It maybe recalled that Government imposed 20% regulatory duty in October 2017.

It might be astonishing for readers to note that this newly imposed regulatory duty on Optic Fiber Cable is on top of the following (already in-place) hefty taxes:

  • Customs Duty: 20%
  • Sales Tax: 17%
  • Value Added Tax: 3%
  • Advance Tax: 5.5% (which is not adjustable for the telecom industry)

These taxes are in addition to freight and other premium deployment charges that telecom companies and internet service providers incur to get their network up and running in the country.

With such enormous amount of taxes, 20% additional regulatory duty will mean that government is in actuality trying to stop ISPs and telecom companies from operating in the country.

Government, at the time of imposition of regulatory duty, said that the decision was taken to curtail imports without considering the fact that optic fiber cable is not a luxury item and is in fact mandatory equipment for expansion of FTTH services in the country.

As evident from recent developments, FTTH operators were fast expanding their services that were until recently, confined to major cities only and that too with limited coverage.

A lot of new deployments and Fiber Optic laying was expected during the next few years but with such exorbitant amount of taxes, this now seems unlikely.

Not to mention, Pakistan’s local manufacturing of Optic Fiber Cable is not expected to meet the demand in the market.

ISPs, considering the situation, have written to the Ministry of IT demanding that the government re-consider its decision of imposing regulatory duty on FTTH lest it hurt the country’s uptake of high-speed broadband.

They also noted that Universal Service Fund projects are going to be impacted with the decision as well.

ISPs said that any further expansion plans will have to be rolled back if decision is not reversed in near future.

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Tech and telecom reporter for over 15 years

  • And On The other hand , Nayatel is not giving me a connection coz there are not enough users in my area.. :(

  • Plus the taxes on internet. Probably the only country in the world which taxes internet. Worse govt ever!

      • Ballay aur teer walon ne bhi apne provinces myn yehi beghairti ki hui hai. Shair walay kanjron ne to phir 2 saal relax kiya tha punjab myn. Es hamam myn sab kanjar hyn.

          • 19.5% Sales tax on internet services has been imposed by Provincial Govt. not Federal Govt. Punjab relaxed this tax for 2 years but no other Provincial Govt followed them including Balla Govt and Teer Govt. So they imposed it again this year.

            • By this warped logic if Sindh has shot itself in foot then others like Punjab and KPK show wait and watch and also shoot itself in foot.

              Why don’t we do the same for other things like Crackdown in corruption, garbage collection and Bhatta? Let’s not fix anything and undo reforms because neighbor has refused to fix his house and not reform. What a joke. Shows mentality of Punjab govt. it’s nothing better than Sindh or KPK.

              Punjab govt spending trillions on super highways to transport people and goods but want to keep dirt roads for information superhighway.

    • Also highest taxes in the world on mobile communications. These are productivity enhancing inventions but our government doesn’t understand that.

      • Bandar k haath main Dugdugi aajye to wo yahi karta hai!
        idher kabhi sheer hakomat karta hai aur Awaam ki cheer paarh karta hia, aur kabhi bhotto ka teer awaam ki Gaaf main daal deite hain!

  • Govt. of Pakistan is against internet connectivity because it weakens the power of the state over its citizens. This is why Pakistan is the most backward of all south asian countries when it comes to IT.

  • Premier cables of Karachi is the biggest thug company. They don’t have fiber to supply as there is shortage but still using regulatory duty RD to further inflate prices artificial. It is daylight robbery and stopping citizens of basic right of information which is guaranteed by constitution. Safety city projects across country is also under threat as we are contractor but nowadays this fiber cable also short.

  • Bhai we are not citizens of Pakistan rather subjects of government. Gamay majay saray vote lekr bethy hain.

  • I can’t believe after having advance income tax, provincial service tax and minimum tax and alternative capital tax this technically illiterate government is now adding additional 20 percent Regulatory Duty on top of existing 20 percent customs duty and sales tax. I feel the government wants to kill IT and Telecom. The ministry of IT and Telecom should be disbanded.

    • Local purchase at 75 percent above international prices? And the local companies are exporting because of global shortage.

      All here to support local industry. This item already has heavy weight so local manufacturer already has advantage. Now the cost is 75-90 percent above international prices. Let’s buy sugar, coal also local but at 90 percent premium over world market price and let’s allow few companies to loot everyone else. That’s what you are saying Mr Wahab

      • I Say Govt. Focus to Support Local Market That’s a Reason to Implement high Percentage of Taxes on Imported Product :
        I Know International Market Price is Less than PAK Price But Kiya KARE :
        Mulk Bhi Chalana hai Aur Budget K Liye Paisa Bhi Chahyeh

        • Sir ji raise price of sugar, wheat and rice to 70 percent premium and then see the riots on the streets. Fiber cable is the same basic commodity needed to enlighten the nation and only difference is that information feed the brain not the stomach.
          See what happened in Hungary when they raised tax on internet. People were on streets.

          I wont be surprised if this govt taxes oxygen we breathe next.

  • Dont forget the impact of exchange rate also. It has depreciated another 5%. The RD 20%, the customs duty 20%, the sales tax 17%, Value added tax 3% and Income tax 5.5%. Add freight charges of 3%. This makes it a whopping 48.5% tax to import 1 meter of fiber cable.
    Definitely the ISPs should stop expanding and put a hold to their plans. This will cause many people laborers to lose their jobs. Well done Ministry of IT, Finance and Customs. To make a few manufacturers happy who cannot even supply fiber because of global shortage, you are ruining the livelihood of hundreds of daily wage workers. Shame on your Anusha Rahman, Shame on your Dar.

  • Aaamir bhai excellent reporting but fiber optic is not just used by FTTH providers but by thousands of cable operators across Pakistan to extend cable tv service to many areas. I think maybe the govt wants to destroy the business of cable operators also.

    • Lol the F**k Man , i am currently on a 40mbps Package Optical fiber Package from Fiber link and is paying as little as 3362 Pkr

      • You are on upgraded packages i bet you’re using PTCL…

        they have upgraded they will also reduce prices but i wonder the basic
        taxes right now are 45.5% if they will add another 20% it will be 65.5%.

        way to kill IT Industry, And yet we were so happy that some company
        choose our 5 citizen’s than india’s 5000 person yearly…..

        What a great nation what a great country!

  • Does this comes under consumer rights to have an internet connection in my specific area (obviously by paying) if the company is operating in my city? Expert opinions please?

  • PTCL Ne Installation Charges Bhi Barha Diye Hain…
    New Broadband over existing Landline: Rs. 2,499 inclusive of Tax
    New Double Play (Landline+Broadband): Rs. 3,999 inclusive of Tax
    New Fiber to the Home (GPON) connection installation charges are upfront PKR. 11,999/

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