Telecom Sector Contributed Rs. 684 Billion in Taxes During 2013-17

Pakistan’s Telecom sector has deposited more than Rs. 684 billion, on account of various taxes/duties to the national exchequer during the last four years (2013-2017).

This was revealed in the Sub-Committee of the Senate Standing Committee on Cabinet Secretariat, which met with Kalsoom Perveen in the chair yesterday.

Approximately $4.2 billion has been invested by telecom companies in Pakistan during the last four fiscal years. Most of this investment has been made by cellular mobile companies in Pakistan.

Telecom sector attracted inflow of more than $2.3 billion Foreign Direct Investment (FDI), corresponding to $ 651.5 million net FDI during the last four fiscal years.

The spectrum auction for NGMS, commonly known as 3G/4G services, constituted a large portion of reported FDI inflow which comes to around $965 million with $147.5 million plus markup to be paid in installments during the next five years.

Pakistan Telecommunication Authority (PTA) contributed a total of Rs. 178.84 billion during the last four years to the national exchequer including:

  • Rs. 96.48 billion in 2013-14,
  • Rs. 7.02 billion in 2014-15,
  • Rs. 34.11 billion in 2015-16,
  • Rs. 33.13 billion in 2016-17,
  • Rs. 8.10 billion in 2017-18.

Convener of the committee expressed concerns over payments (generated from auction) by telecom companies in Pakistani currency instead of dollars while saying it is causing billions in losses to the national exchequer.

It has been observed that companies have been given advantages at the cost of government expenses. Committee Chairman said, “If telecom companies are doing business in the country, but not paying actual taxes, then what is the advantage to the national exchequer,” adding that she was not satisfied from the briefing and directed Federal Board of Revenue (FBR), NADRA, FIA and PTA to submit related documents in the next meeting.

She further said that an amnesty scheme may be launched to attract more companies to the country. Additionally, a questionnaire would be sent to the Cabinet Division about postings/transfers, recruitments as well as the administrative power and selection criteria in PTA, which are under investigation.

The committee was further informed that PTA successfully carried out an auction for the Next Generation Mobile Services (NGMS) spectrum, paving way for the launch of 3G, 4G LTE services in Pakistan. PTA’s transparent and fair conduct of NGMS spectrum auction produced a total of $1.22 billion for the government of Pakistan.

With Spectrum Auction of 3G & 4G Services, the total cellular Mobile subscribers stood at 112.4 million including 39.1 million 3G and 7.4 million 4G cellular mobile subscriptions at the end of October 2017. More than 86% of the population has access to telecom services so far.

At the end of October 2017, total tele-density i.e. the number of telecom subscriptions per 100 inhabitants, reached 72.01%, comprising cellular mobile (70.71%) and Local loop (1.30%) services.