Govt clarifies tax plans for upcoming budget

14 Jun 2021

The Pakistani government has clarified that proposed taxes on telecom services were rejected by the Prime Minister and Cabinet, and were included in a draft budget for the 2021/2022 financial year in error. Local daily Dawn cites Minister for Energy Hammad Azhar as saying that the measures were rejected and will not be included in the draft budget that is placed before parliament for approval. The official made the announcement following a fierce public backlash against the recommendations, which had included taxes of PKR1 (USD0.006) per call over three minutes, PKR0.1 per SMS and PKR5 per GB of data.

Meanwhile, the Ministry of IT & Telecommunication (MoITT) confirmed that several positive developments for the sector are to be featured in the budget, including the granting of industry status to the telecom sector – opening additional lines of credit from the State Bank of Pakistan (SBP) and other banks – a reduction in the federal excise duty on telecommunications services to 16% from 17% and the lowering of the advance income tax on mobile services from 12.5% to 10%, and to 8% in the 2022/2023 financial year.