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Proposal of Tax Cuts to increase revenue from Telecom Sector by PTA


Pakistan Telecommunication Authority (PTA) has made a few recommendations to the administration for expanding income from the telecom part which will in the meantime upset the area in the close future. The Commercial Affairs Division of PTA has arranged a presentation. Here’s a point by point once-over of the issues being confronted by the administration and telecom segment and how the PTA is proposing to overcome them.

Withholding Tax

Current Tax Rate: 14%


Larger part of the endorsers are non-charge filers because of salary BTL, consequently, can’t get alteration in their yearly expense forms. There are an aggregate of 3.5 million NTN holders in Pakistan. Our dynamic citizen userbase is around 0.8 million. Just 0.6% of portable endorsers could be genuine citizens, which is a staggeringly low sum. Since for rest of the economy, W.H.T is for the most part charged @10%, many billions of rupees ahead of time wage duty are not being asserted.


Government Board of Revenue (FBR) ought to either abrogate/support this expense or devise a component to charge withholding charge from just those endorsers who are generally assessable and are subject to document an assessment form.

General Sales Tax

Current Tax Rate: 18-19.5%


GST/FED is being charged @19.5% in Punjab, KPK and Balochistan, 18% in Sindh and 18.5% in rest of Pakistan) much higher when contrasted with normal 16% GST on different divisions of economy.

This kind of uneven treatment, when telco division has been one of the most elevated givers in assessment forms and has brought critical FDI, is making the relationship between the telecom administrators and the administration weak.


GST/FED on telecom administrations ought to be lessened to the normal GST rates in different parts.

Charge on Supply of SIM

Current Tax Rate: Rs. 250/new or supplanted SIM


The re-presentation of SIM Activation Tax on the supply of another or supplanted SIM Tax @Rs 250 for each SIM is oppressive. Uniquely since more than US$ 25 million has been put resources into the Biometric Verification System (BVS) exercise in 2014-15 and US$ 1.2 billion was spent on securing 3G and 4G range in the bartering.


The duty ought to be evacuated.

Mechanical Undertaking’ Status

Current Status: Telecom segment not delegated “industry”


Without the Industrial undertaking status, telecom administrators can’t alter the salary charge paid at the season of import which is dealt with as definite expense obligation.


To characterize telecom division as “Modern Undertaking” under statement (b) of segment 2(29C) of the Income Tax Ordinance 2001

Increment in Custom Duty on Import

Current Rate: 5-20%


Custom Duty on the import of telecom hardware has been expanded from 0% – 5% in 2012-13 to the present level of 5%-15%, at a stage when administrators are required to up-level their base for the expedient take off and appropriation of versatile broadband administrations in Pakistan.


FBR ought to return the expansion in custom obligation.

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