New Taxes Will Kill Digital TV in Pakistan Before It Becomes Mainstream

The government of Pakistan has increased the taxes on “set top boxes”, IPTV boxes and DTH boxes in its latest revision. The move is primarily aimed at encouraging local production, however, the market has responded negatively to the development.

Digitization of TV in Pakistan is one of the lowest in the region. For a perspective, less than 5% of Pakistani TV devices are digital, compared to 95% of TV digitization in neighboring country India. These numbers show that Pakistan is yet to start its journey towards TV digitization.

While DTH services have seen regulatory and judicial hurdles for years now, Pakistan is yet to see its first DTH operator, especially at a time when most of India’s TV consumer base has gone digital.

Considering that Pakistan has barely just started, taxing these digital TV boxes is beyond comprehension as the rule of thumb is to tax established and flourished industries instead of pressing the nascent sector that is to compete with giants from the Indian territory.

Interestingly, its not only digital TV boxes that are taxed heavily, fiber optic — that’s used for the broadband services and essentially for the IPTV services — are also taxed higher than other sectors.

For reference, the total amount of duties and taxes on the import of fiber optic cable (which is required not just for FTTH but also for 3G/4G/5G tower site backhaul) is now 62.5% at the time of import (20% CD, 7% Additional CD, 10% RD, 20% Sales Tax and 5.5% Advance Income Tax – non adjustable).

This actually means that a product that costs $1 at the source is priced at $1.62 when it reaches Pakistan.

On top of this, there’s currency devaluation, which in itself is altogether a challenge that’s beyond anyone’s understanding.

We do understand that a lot of items (such as mentioned above) are taxed by the government not only to make extra money but to also encourage local production, however, taxing a sector that is yet to even begin its flight is never going to work.

India, for instance, taxed its digital TV products after they had attained a sufficient uptake. And this is also probably why they were able to achieve such a high digital TV penetration in the country, i.e. by lowering the entry cost.

It would be more wise to let a sector flourish and then tax it as per usual standards to reap maximum benefits.

Another point worth noticing is that there are items, such as set top boxes and fiber cables, that aren’t produced locally at the required scale to meet the market demands. Therefore, it is necessary for these items to be imported from abroad to keep up with the demand.

The government should also consider the fact that it can’t blindly increase tax rates for a range of products without considering that there are items which are already highly taxed.

The ideal scenario is to look for each item, the associated taxes on it and the impact (positive or negative) the taxes could bring on the sector, economy and the country, before actually revising each and every item.

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


  • I think people need to admit that the government does not want the country to digitize. It taxes telecoms a lot and it taxes internet services as well.

    Most of the people in charge of the country are old, backward and control freaks. Digitization gives people more options to learn, to play and to earn and this freaks out the control freaks in charge of the country. So they are entirely against it.

    Once you admit to yourself and others around you that the govt. hates ICT you can then tackle the problem properly. Ideally you remain in the informal sector as much as possible because that is what they want people to do.

    For example Indian DTH services are widely available in the country. They are entirely in the informal sector with payments being made via hawala. So it’s entirely possible to flourish without appearing on the radar of the old people in power. Let pemra debate the finer points of Pak DTH services without ever letting them launch. Meanwhile people are already subscribed to indian ones which have made great inroads into our market.

    Similarly there are many free agents and freelancers in the country who remain completely off the official radar.

    Small scale and unofficial is better in Pakistan.

  • Baby don’t insult India by comparing yourself with India. India is enjoying Democracy and political stability since 1947. While here is hide and seek game. How will a puppet government encourage digitization who belief in censorship of free voice.

  • This is huge setback for upcoming DTH. I think Pak DTH arrival will become a dream for Pakistanis as lots of hurdles are coming its ways. DTH companies will import boxed and this move will damage the industry badly as it has not started yet.

  • Ohho… Really sad. Stop terrorism funding. Use the money for people needs. Stop the production of arms, ammunition and bombs. Use the money for the production of set-top boxes, satellites to start the digital revolution. Please don’t compare with India. It will take another 50 years for Pakistan to reach the current situations what we have in India.

    • What a simpleton. Before stopping production of arms, ammunition etc, please stop placing guards outside your homes and banks. Stop insulting our collective intellect please. Could ya?

  • Pakistan has a very bad habit of comparing itself with Bhārat, just because it got separated from the former on a hate note and are neighbours next door. Pakistan is considered a failed state whereas Bhārat is one of the World’s leading powers.
    Bhārat believes in open education, whereas Pakistan still is fixed with Islamic ghettoism.

    • Ur right but you know, Bharat has some bad habits as well:

      1. Always follow us, what we are going.. why? any fear from us?
      2. Always criticize us, even we lease bother
      3. As u mentioned, Bharat is one of the world’s leading powers and ur GDP is surpassing China’s, unfortunately Bharat has not a single habit like china or any other leading countries

      SUMMARY:
      Ur good!!! Just in ur minds and others are bad. Plz if u believe in open education, show this as well, be positive. Have a look at Kashmir. Eliminate negativity. Being a leading power, It is not necessary to be negative all the time.

      I hope a big -ve comment from u but ur open education test starts now.
      I will not comment as we as a nation lease bother.

      thanks and put something positive for ur country.


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