Pakistan's telecom sector raises concerns over heavy taxes

Pakistan’s Telecom Operators Association has expressed concerns over the heavy taxes slapped in budget 2024, ARY News reported.

In a letter written to the Chairman of the Standing Committee on Finance, Salim Mandviwala, the Telecom Operators expressed concerns over the heavy taxes introduced in the budget.

The telecom sector has warned that foreign investment might withdraw from Pakistan if tax issues are not resolved. According to the telecom operators, unresolved tax issues could lead to legal complications for the government.

The letter highlights that two major market players have already decided to leave Pakistan. The telecom sector contributed PKR 340 billion in tax revenue last year, and has attracted direct investment of USD 15 billion to date, the letter stated.

The implementation of budget proposals will severely impact the dream of a Digital Pakistan, the letter’s content reveals. The letter further mentions that collecting 75% advance tax from non-filer telecom users is impractical.

The letter outlines that this decision will result in revenue loss for both the telecom sector and the government. Additionally, telecom companies have expressed concerns over the Income Tax General Order.

Read more: Non-filers to pay additional taxes on mobile top-up, bundles

Regarding the issue of blocking SIM cards of non-filers, the telecom sector is being considered for penalties. The telecom sector is not a party to the tax issue concerning non-filers, according to the letter.

Increasing the sales tax rate on mobile phone sets valued up to USD 500 will negatively impact the inclusion of the low-income group, the letter mentions.

The Telecom operators have requested a time for meeting with Committee Chairman Saleem Mandviwalla to present their concerns.