Withdrawal of Mobile Internet Taxes Still Pending

Regardless of the repeated orders by Punjab Chief Minister Shahbaz Sharif and Finance Minister Dr. Ayesha Ghaus, the bureaucracy at provincial finance department and Punjab CM secretariat is not prepared to follow the instructions of the provincial government to remove tax on mobile internet and data services.

As a result, the leading mobile telecom operator has already passed on a 19.5% GST on mobile internet to their customers whereas four operators are still waiting for notification to be issued by the PRA.

Officials in the Punjab Revenue Authority (PRA) have confirmed that the PRA is collecting 19.5% GST and would carry on this practice until any further notice of the government to remove the tax. Some officials who did not want their names to be disclosed, informed that Punjab imposed 19.5 % GST through a notification issued on May 28 2015. Chief minister as well as the finance minister said several times to withdraw this tax but no notification was issued by the government so far.

Withdrawal of Mobile Internet Taxes Still Pending

Officials said that federal government had already imposed 14% income tax on telecom sector in current year budget. The tax officials had recommended an avenue of generating tax revenues from the telecom sector because the number of subscribers using internet is growing rapidly whereas telecom sector is sophisticated and easy for collection of taxes compared with different sectors including automobile and property.
It is important to mention that Chief Minister Shahbaz Sharif gave a statement to remove tax on mobile internet in a meeting with PRA officials on July 29. Dr. Ayesha Ghause also announced the withdrawal of the mobile internet taxes on floor of House in her budget speed on June 12.

An official of leading mobile phone said that the unwritten assurance of the provincial ministry is not sufficient for corporation but a notification is important to avoid deduction of GST on mobile internet.
The official also added that any order by CM Punjab which is not in written form can not be taken serious because Minister of Finance also stated the same withdrawal earlier but no implementation was made.

Officials of rest of four mobile operators said the government should be honest with the public and value its commitment with its voters largely for the concern of masses and social-economic development of the province. We hope that Provincial Government will accomplish its responsibility at any cost because it realizes the benefit of mobile internet and its related development in governance, education and economy.

The country got first position in the world for highest tax with 53% of the overall taxes, including 19.5% on call and voice services, 14% on withholding tax and now 19.5% on additional service which was imposed by Punjab government on May 28.

Pakistan has surpassed Turkey, Gabon and Tanzania in overall taxes. Turkey overall taxes is less than 50%, Gabon 40% and Tanzania 34% respectively.