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To increase revenue from Telecom Sector, PTA proposes Tax Cuts

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Pakistan Telecommunication Authority (PTA) has made a few recommendations to the administration for expanding income from the telecom area which will in the meantime reform the segment in the close future. The Commercial Affairs Division of PTA has arranged a presentation, demonstrates the hindrances in the telecom segment development furthermore propose its cures.

Here’s a point by point once-over of the issues being confronted by the legislature and telecom segment and how the PTA is proposing to overcome them.

Withholding Tax

Current Tax Rate: 14%

Issue

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

Solution:

Government Board of Revenue (FBR) ought to either annul/justify this duty or devise a component to charge withholding charge from just those endorsers who are generally assessable and are at risk to document an expense form.

General Sales Tax

Current Tax Rate: 18-19.5%

Issue

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 segments of economy.

This kind of uneven treatment, when telco part has been one of the most elevated givers in expense forms and has brought noteworthy FDI, is making the relationship between the telecom administrators and the administration fragile.

Solution

GST/FED on telecom administrations ought to be diminished to the normal GST rates in different areas.

Charge on Supply of SIM

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

Issue

The re-presentation of SIM Activation Tax on the supply of another or supplanted SIM Tax @Rs 250 for each SIM is oppressive. Exceptionally 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 gaining 3G and 4G range in the bartering.

Solution

The assessment ought to be evacuated.

Mechanical Undertaking’ Status Current Status: Telecom part not delegated “industry”

Issue

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

Solution

To characterize telecom part 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%

Issue

Custom Duty on the import of telecom gear 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 selection of portable broadband administrations in Pakistan.

Solution:

FBR ought to return the expansion in custom obligation.

Pakistan Telecommunication Authority (PTA) has made a few recommendations to the administration for expanding income from the telecom area which will in the meantime reform the segment in the close future. The Commercial Affairs Division of PTA has arranged a presentation, demonstrates the hindrances in the telecom segment development furthermore…

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